Fourth Quarter Highlights:
CDK Global, Inc. (Nasdaq:CDK) today announced its fourth quarter
and fiscal 2018 financial results, its earnings outlook for fiscal
2019 and long-term growth outlook.
Fiscal 2018 Results
Year-over-year highlights are below:
|
|
|
|
|
Fiscal 2018
Results |
|
GAAP |
|
Adjusted |
Revenues |
|
up 2% to $2,273.2
million |
|
up 2% to $2,273.2
million |
Earnings before income
taxes |
|
up 18% to $512.0
million |
|
up 9% to $642.2
million |
Net earnings
attributable to CDK |
|
up 29% to $380.8
million |
|
up 17% to $446.6
million |
Diluted net earnings
attributable to CDK per share |
|
up 40% to $2.78 per
share |
|
up 27% to $3.26 per
share |
Margin |
|
Net earnings
attributable to CDK margin up 350 bps to 16.8% |
|
EBITDA margin up 380
bps to 35.9% |
|
|
|
|
|
Fourth Quarter Fiscal
2018 Results |
|
GAAP |
|
Adjusted |
Revenues |
|
up 1% to $569.2
million |
|
up 1% to $569.2
million |
Earnings before income
taxes |
|
up 45% to $136.9
million |
|
up 12% to $163.7
million |
Net earnings
attributable to CDK |
|
up 69% to $99.4
million |
|
up 26% to $114.6
million |
Diluted net earnings
attributable to CDK per share |
|
up 83% to $0.75 per
share |
|
up 38% to $0.87 per
share |
Margin |
|
Net earnings
attributable to CDK margin up 710 bps to 17.5% |
|
EBITDA margin up 450
bps to 36.8% |
|
|
|
|
|
“We had outstanding sales in the quarter and
fiscal year that provide the momentum to accelerate future growth,”
said Brian MacDonald, chief executive officer. “We are pleased with
the overachievement of our adjusted EBITDA margin target of 35% for
fiscal 2018, and are well on our way to achieving the 40% adjusted
EBITDA margin exit target for fiscal 2019 while investing in
innovation, the core operations of the business, and
acquisitions.”
Please refer to the tables at the end of this
release for a reconciliation of the GAAP results to the non-GAAP
results, which we refer to as our adjusted results throughout the
body of this press release. Results below reflect year-over-year
comparisons.
As described below under the Non-GAAP Financial
Measures section at the end of this press release, effective July
1, 2017, we began incorporating additional adjustments within our
calculations of certain adjusted financial measures, including
adjusted net earnings attributable to CDK, adjusted EBITDA and
adjusted EBITDA margin. Each adjusted growth rate is shown
against a comparably calculated fiscal 2017 figure.
Impacts to the Fiscal Year:
- Foreign exchange rates: Growth in revenues and earnings before
income taxes were both positively impacted by 1 percentage point by
foreign exchange rates.
- Tax rate: The GAAP effective tax rate for fiscal 2018 was 24.1%
compared to 30.5% last year. The adjusted effective tax rate
for fiscal 2018 was 29.1% compared to 34.2% last year.
Impacts to the Fourth Quarter:
- Foreign exchange rates: Growth in revenues and earnings before
income taxes were both positively impacted by 1 percentage point by
foreign exchange rates.
- Tax rate: The GAAP effective tax rate for the fourth quarter of
fiscal 2018 was 25.8% compared to 35.3% in last year’s fourth
quarter. The adjusted effective tax rate for the fourth
quarter of fiscal 2018 was 28.6% compared to 36.2% in last year’s
fourth quarter.
CDK Segment Information
CDK North America: Retail Solutions North
America
Fiscal 2018 Results
- Revenues increased 1% to $1,611.1 million. On a constant
currency basis, revenues were flat.
- GAAP earnings before income taxes increased 9% to $659.0
million; adjusted earnings before income taxes increased 13% to
$682.0 million. On a constant currency basis, earnings before
income taxes increased 12%.
- GAAP pretax margin expanded 310 bps to 40.9%; adjusted pretax
margin expanded 440 bps to 42.3%. Margin expansion was
primarily driven by operating efficiencies associated with the
business transformation plan, scale from increased subscription
revenues, and lower incentive compensation.
Fourth Quarter Fiscal 2018 Results
- Revenues declined 1% to $402.1 million. On a constant
currency basis, revenues also declined
1%.
- GAAP earnings before income taxes increased 7% to $170.0
million; adjusted earnings before income taxes increased 10% to
$174.4 million. On a constant currency basis, earnings before
income taxes increased 9%.
- GAAP pretax margin expanded 330 bps to 42.3%; adjusted pretax
margin expanded 420 bps to 43.4%. Margin expansion was
primarily driven by operating efficiencies associated with the
business transformation plan, scale from increased subscription
revenues, and lower incentive compensation.
CDK North America: Advertising North America
Fiscal 2018 Results
- Revenues declined by 1% to $305.8 million.
- GAAP earnings before income taxes decreased 16% to $37.1
million; adjusted earnings before income taxes decreased 16% to
$37.2 million.
- GAAP pretax margin declined 230 bps to 12.1%; adjusted pretax
margin declined 220 bps to 12.2% primarily due to a shift in
revenue mix.
Fourth Quarter Fiscal 2018 Results
- Revenues declined by 3% to $75.0 million.
- GAAP earnings before income taxes decreased 41% to $7.6
million; adjusted earnings before income taxes decreased 40% to
$7.7 million.
- GAAP pretax margin declined 650 bps to 10.1%; adjusted pretax
margin declined 630 bps to 10.3% primarily due to a shift in
revenue mix and timing of media spend.
CDK International
Fiscal 2018 Results
- Revenues increased 14% to $356.3 million. On a constant
currency basis, revenues increased 7%.
- Earnings before income taxes increased 30% to $97.7 million. On
a constant currency basis, earnings before income taxes increased
23%.
- Pretax margin expanded 340 bps to 27.4% primarily due to scale
from increased revenues, operating efficiencies associated with the
business transformation plan, and lower incentive
compensation.
Fourth Quarter Fiscal 2018 Results
- Revenues increased 13% to $92.1 million. On a constant
currency basis, revenues increased 6%.
- Earnings before income taxes increased 38% to $27.4 million. On
a constant currency basis, earnings before income taxes increased
31%.
- Pretax margin expanded 530 bps to 29.8% primarily due to scale
from increased revenues, operating efficiencies associated with the
business transformation plan, and lower incentive
compensation.
Fiscal 2019 Guidance
The guidance provided does not reflect the
impact of our adoption of ASC 2014-09 “Revenue from Contracts with
Customers” (“ASC 606”), which we are adopting for fiscal year 2019
using the modified retrospective transition method. We will
not recast historical information and will report financial results
in fiscal 2019 under both standards for the transition year.
Under the new standard, in fiscal 2019 we expect to recognize less
revenue primarily due to the change in timing of revenue
recognition related to on-site software licenses, which is
partially offset by the ability to capitalize more costs to obtain
and fulfil our contracts. Our assessment for fiscal 2019 is
ongoing and subject to finalization, and therefore we will not
provide guidance on the ASC 606 basis at this
time.
|
|
Fiscal 2019
Guidance |
|
Revenues |
up (1.0%) - 1.0% |
Diluted earnings
attributable to |
$3.20
- $3.30 |
CDK per share |
up 15.0% - 19.0% |
Adjusted diluted
earnings attributable to |
$3.85
- $3.95 |
CDK per share |
up 15.0% - 18.0% |
Net earnings
attributable to CDK |
up
6.0% - 10.0% |
Margin |
17.5% - 18.5% |
Adjusted EBITDA |
up
8.0% - 12.0% |
Margin |
39.0% - 40.0% |
|
|
As described below under the Non-GAAP Financial
Measures section of this press release, effective July 1, 2018 and
commencing with fiscal 2019 guidance, we will adjust for
amortization of acquired intangible assets within our calculations
of adjusted earnings before income taxes, adjusted provision for
income taxes, adjusted net earnings attributable to CDK, and
adjusted diluted net earnings attributable to CDK per share.
For purposes of calculating and presenting the fiscal 2019 guidance
each adjusted growth rate is shown against a comparably calculated
fiscal 2018 figure.
Tax Rate
We anticipate our GAAP effective tax rate for
fiscal 2019 will be 25.0% - 26.0% compared to 24.1% for fiscal
2018. The adjusted effective tax rate for fiscal 2019 is
expected to be 25.0% - 26.0% compared to 29.1% for fiscal
2018.
Long-Term Growth Outlook
We are updating our growth expectations for
fiscal years 2020 and beyond. We will conduct an investor
roadshow to discuss the growth outlook in more detail; please stay
tuned for more information.
|
Fiscal 2020
and Beyond Growth Outlook |
Revenues |
up 4.0% - 5.0% |
Adjusted EBITDA |
up 8% - 12% |
Adjusted diluted net
earnings attributable to CDK per share |
up 15% - 20% |
|
|
For our fiscal 2020 and beyond long-term growth
outlook of adjusted EBITDA and adjusted diluted net earnings
attributable to CDK per share, the information necessary to
calculate such measures on a GAAP basis is unavailable or dependent
on the timing of future events outside of our control.
Therefore, because of the uncertainty and variability of the nature
of the amount of future adjustments, which could be significant, no
reconciliation is being provided at this time.
Website Schedules
Other financial information, including financial
statements and supplementary schedules presented on a GAAP and
adjusted basis, and the schedule of quarterly revenues and pretax
earnings by reportable segment have been updated for the fourth
quarter and full year of fiscal 2018 and will be posted to the CDK
Investor Relations website, http://investors.cdkglobal.com, in the
“Financial Information” section.
Webcast and Conference Call
An analyst conference call will be held today,
Tuesday, August 14, 2018, at 7:30 a.m. CT. A live webcast of the
call will be available on a listen-only basis. To listen to the
webcast go to the CDK Investor Relations website,
http://investors.cdkglobal.com, and click on the webcast icon. An
accompanying slide presentation will be available to download and
print about 60 minutes before the webcast at the CDK Investor
Relations website at http://investors.cdkglobal.com. CDK financial
news releases, current financial information, SEC filings and
Investor Relations presentations are accessible at the same
website.
About CDK Global
With more than $2 billion in revenues,
CDK Global (Nasdaq:CDK) is a leading global provider of
integrated information technology and digital marketing solutions
to the automotive retail and adjacent industries. Focused on
enabling end-to-end automotive commerce, CDK Global provides
solutions to dealers in more than 100 countries around the world,
serving approximately 28,000 retail locations and most automotive
manufacturers. CDK solutions automate and integrate all parts
of the dealership and buying process from targeted digital
advertising and marketing campaigns to the sale, financing,
insuring, parts supply, repair and maintenance of
vehicles. Visit cdkglobal.com.
|
CDK Global, Inc. |
Consolidated Statements of
Operations |
(In millions, except per share amounts) |
|
|
Three Months Ended |
|
Fiscal Year Ended |
|
June 30, |
|
June 30, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Revenues |
$ |
569.2 |
|
|
$ |
565.4 |
|
|
$ |
2,273.2 |
|
|
$ |
2,220.2 |
|
|
|
|
|
|
|
|
|
Expenses: |
|
|
|
|
|
|
|
Cost of
revenues |
288.5 |
|
|
308.9 |
|
|
1,182.0 |
|
|
1,234.9 |
|
Selling,
general and administrative expenses |
118.2 |
|
|
135.7 |
|
|
475.8 |
|
|
477.7 |
|
Restructuring expenses |
4.3 |
|
|
8.1 |
|
|
20.9 |
|
|
18.4 |
|
Total
expenses |
411.0 |
|
|
452.7 |
|
|
1,678.7 |
|
|
1,731.0 |
|
|
|
|
|
|
|
|
|
Operating earnings |
158.2 |
|
|
112.7 |
|
|
594.5 |
|
|
489.2 |
|
|
|
|
|
|
|
|
|
Interest
expense |
(25.3 |
) |
|
(19.1 |
) |
|
(95.9 |
) |
|
(57.2 |
) |
Other
income, net |
4.0 |
|
|
0.5 |
|
|
13.4 |
|
|
3.3 |
|
|
|
|
|
|
|
|
|
Earnings before income
taxes |
136.9 |
|
|
94.1 |
|
|
512.0 |
|
|
435.3 |
|
|
|
|
|
|
|
|
|
Provision
for income taxes |
(35.3 |
) |
|
(33.2 |
) |
|
(123.3 |
) |
|
(132.8 |
) |
|
|
|
|
|
|
|
|
Net earnings |
101.6 |
|
|
60.9 |
|
|
388.7 |
|
|
302.5 |
|
Less: net earnings
attributable to noncontrolling interest |
2.2 |
|
|
2.2 |
|
|
7.9 |
|
|
6.9 |
|
Net earnings
attributable to CDK |
$ |
99.4 |
|
|
$ |
58.7 |
|
|
$ |
380.8 |
|
|
$ |
295.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
attributable to CDK per share: |
|
|
|
|
|
|
|
Basic |
$ |
0.76 |
|
|
$ |
0.41 |
|
|
$ |
2.80 |
|
|
$ |
2.01 |
|
Diluted |
$ |
0.75 |
|
|
$ |
0.41 |
|
|
$ |
2.78 |
|
|
$ |
1.99 |
|
|
|
|
|
|
|
|
|
Weighted-average common
shares outstanding: |
|
|
|
|
|
|
|
Basic |
131.3 |
|
|
142.7 |
|
|
135.8 |
|
|
146.7 |
|
Diluted |
132.4 |
|
|
144.5 |
|
|
136.8 |
|
|
148.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CDK Global, Inc. |
Consolidated Balance Sheets |
(In millions) |
|
|
June 30, |
|
June 30, |
|
2018 |
|
2017 |
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash
equivalents |
$ |
804.4 |
|
|
$ |
726.1 |
|
Accounts
receivable, net of allowances |
374.6 |
|
|
372.1 |
|
Other current
assets |
188.3 |
|
|
180.6 |
|
Total current assets |
1,367.3 |
|
|
1,278.8 |
|
|
|
|
|
Property, plant and
equipment, net |
131.9 |
|
|
135.0 |
|
Other assets |
165.5 |
|
|
184.1 |
|
Goodwill |
1,217.2 |
|
|
1,181.2 |
|
Intangible assets,
net |
126.5 |
|
|
104.0 |
|
Total assets |
$ |
3,008.4 |
|
|
$ |
2,883.1 |
|
|
|
|
|
Liabilities and
Stockholders' Deficit |
|
|
|
Current
liabilities: |
|
|
|
Current
maturities of long-term debt and capital lease obligations |
$ |
45.2 |
|
|
$ |
46.5 |
|
Accounts
payable |
50.5 |
|
|
38.9 |
|
Accrued expenses
and other current liabilities |
198.0 |
|
|
188.7 |
|
Accrued payroll
and payroll-related expenses |
85.7 |
|
|
106.2 |
|
Short-term
deferred revenues |
169.0 |
|
|
172.3 |
|
Total current liabilities |
548.4 |
|
|
552.6 |
|
|
|
|
|
Long-term debt and
capital lease obligations |
2,575.5 |
|
|
2,125.2 |
|
Long-term deferred
revenues |
110.4 |
|
|
136.1 |
|
Deferred income
taxes |
56.7 |
|
|
65.9 |
|
Other liabilities |
64.7 |
|
|
60.1 |
|
Total liabilities |
3,355.7 |
|
|
2,939.9 |
|
|
|
|
|
Stockholders'
Deficit: |
|
|
|
Preferred
stock |
— |
|
|
— |
|
Common
stock |
1.6 |
|
|
1.6 |
|
Additional
paid-in-capital |
679.8 |
|
|
608.6 |
|
Retained
earnings |
753.0 |
|
|
452.7 |
|
Treasury stock,
at cost |
(1,810.7 |
) |
|
(1,144.7 |
) |
Accumulated
other comprehensive income |
11.5 |
|
|
8.0 |
|
Total CDK stockholders' deficit |
(364.8 |
) |
|
(73.8 |
) |
Noncontrolling
interest |
17.5 |
|
|
17.0 |
|
Total stockholders' deficit |
(347.3 |
) |
|
(56.8 |
) |
Total liabilities and stockholders' deficit |
$ |
3,008.4 |
|
|
$ |
2,883.1 |
|
|
|
|
|
|
|
|
|
|
CDK Global, Inc. |
Consolidated Statements of Cash
Flows |
(In millions) |
|
|
Years Ended June 30, |
|
2018 |
|
2017 |
|
2016 |
Cash Flows from
Operating Activities: |
|
|
|
|
|
Net earnings |
$ |
388.7 |
|
|
$ |
302.5 |
|
|
$ |
246.8 |
|
Adjustments to
reconcile net earnings to cash flows provided by operating
activities: |
|
|
|
|
|
Depreciation and amortization |
79.1 |
|
|
70.3 |
|
|
64.0 |
|
Deferred
income taxes |
(10.1 |
) |
|
20.9 |
|
|
(3.6 |
) |
Stock-based compensation expense |
35.7 |
|
|
55.4 |
|
|
36.4 |
|
Other |
5.0 |
|
|
4.6 |
|
|
(5.6 |
) |
Changes in operating
assets and liabilities, net of effects from acquisitions |
|
|
|
|
|
Increase
in accounts receivable |
(2.8 |
) |
|
(8.3 |
) |
|
(57.0 |
) |
Decrease
(increase) in other assets |
7.9 |
|
|
(1.9 |
) |
|
3.0 |
|
Increase
in accounts payable |
11.8 |
|
|
4.4 |
|
|
15.3 |
|
(Decrease) increase in accrued expenses and other liabilities |
(53.7 |
) |
|
(16.9 |
) |
|
20.8 |
|
Net cash flows provided
by operating activities |
461.6 |
|
|
431.0 |
|
|
320.1 |
|
|
|
|
|
|
|
Cash Flows from
Investing Activities: |
|
|
|
|
|
Capital
expenditures |
(46.0 |
) |
|
(62.4 |
) |
|
(50.8 |
) |
Proceeds from sale of
property, plant and equipment |
1.8 |
|
|
0.5 |
|
|
1.1 |
|
Capitalized
software |
(41.1 |
) |
|
(31.8 |
) |
|
(13.5 |
) |
Acquisitions of
businesses, net of cash acquired |
(29.0 |
) |
|
— |
|
|
(18.1 |
) |
Contributions to
investments |
— |
|
|
(2.1 |
) |
|
(10.0 |
) |
Proceeds from
investments |
0.8 |
|
|
7.9 |
|
|
9.7 |
|
Net cash flows used in
investing activities |
(113.5 |
) |
|
(87.9 |
) |
|
(81.6 |
) |
|
|
|
|
|
|
Cash Flows from
Financing Activities: |
|
|
|
|
|
Proceeds from long-term
debt |
500.0 |
|
|
1,000.0 |
|
|
250.0 |
|
Repayments of long-term
debt and capital lease obligations |
(46.4 |
) |
|
(36.9 |
) |
|
(20.0 |
) |
Dividends paid to
stockholders |
(80.1 |
) |
|
(80.7 |
) |
|
(82.3 |
) |
Repurchases of common
stock |
(623.6 |
) |
|
(700.0 |
) |
|
(561.0 |
) |
Proceeds from exercise
of stock options |
8.9 |
|
|
14.7 |
|
|
6.7 |
|
Excess tax benefit from
stock-based compensation awards |
— |
|
|
— |
|
|
8.9 |
|
Withholding tax
payments for stock-based compensation awards |
(10.6 |
) |
|
(12.2 |
) |
|
(8.7 |
) |
Payments of deferred
financing costs |
(7.9 |
) |
|
(10.6 |
) |
|
(2.1 |
) |
Dividend payments to
noncontrolling owners |
(7.4 |
) |
|
(6.3 |
) |
|
(5.0 |
) |
Acquisition-related
payments |
(4.1 |
) |
|
(8.1 |
) |
|
(6.2 |
) |
Recovery of dividends
paid |
— |
|
|
— |
|
|
0.4 |
|
Net cash flows (used
in) provided by financing activities |
(271.2 |
) |
|
159.9 |
|
|
(419.3 |
) |
|
|
|
|
|
|
Effect of exchange rate
changes on cash and cash equivalents |
1.4 |
|
|
4.0 |
|
|
(8.3 |
) |
|
|
|
|
|
|
Net change in cash and
cash equivalents |
78.3 |
|
|
507.0 |
|
|
(189.1 |
) |
|
|
|
|
|
|
Cash and cash
equivalents, beginning of period |
726.1 |
|
|
219.1 |
|
|
408.2 |
|
|
|
|
|
|
|
Cash and cash
equivalents, end of period |
$ |
804.4 |
|
|
$ |
726.1 |
|
|
$ |
219.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
CDK Global, Inc.Segment Financial
Data(In millions)(Unaudited)
As described below under the Non-GAAP Financial Measures section
of this press release, effective July 1, 2017, we began
incorporating additional adjustments within our calculations of
adjusted earnings before income taxes, where management has deemed
it appropriate to better reflect our underlying operations. Other
segment information for fiscal 2017 has been restated to exclude
stock-based compensation from adjusted earnings before income taxes
to conform to the new presentation.
|
|
|
Segment Revenues |
|
Three Months Ended |
|
|
|
|
|
Fiscal Year Ended |
|
|
|
|
|
June 30, |
|
Change |
|
June 30, |
|
Change |
|
2018 |
|
2017 |
|
$ |
|
% |
|
2018 |
|
2017 |
|
$ |
|
% |
CDK North America: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail
Solutions North America: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscription revenue |
$ |
327.3 |
|
|
$ |
319.5 |
|
|
$ |
7.8 |
|
|
2 |
% |
|
1,306.3 |
|
|
$ |
1,261.4 |
|
|
$ |
44.9 |
|
|
4 |
% |
Transaction revenue |
42.2 |
|
|
46.3 |
|
|
(4.1 |
) |
|
(9 |
)% |
|
164.0 |
|
|
179.5 |
|
|
(15.5 |
) |
|
(9 |
)% |
Other
revenue |
32.6 |
|
|
40.8 |
|
|
(8.2 |
) |
|
(20 |
)% |
|
140.8 |
|
|
159.8 |
|
|
(19.0 |
) |
|
(12 |
)% |
Total
Retail Solutions North America (a) |
$ |
402.1 |
|
|
$ |
406.6 |
|
|
$ |
(4.5 |
) |
|
(1 |
)% |
|
$ |
1,611.1 |
|
|
$ |
1,600.7 |
|
|
$ |
10.4 |
|
|
1 |
% |
Advertising North America (b) |
75.0 |
|
|
77.5 |
|
|
(2.5 |
) |
|
(3 |
)% |
|
305.8 |
|
|
307.6 |
|
|
(1.8 |
) |
|
(1 |
)% |
CDK International
(c) |
92.1 |
|
|
81.3 |
|
|
10.8 |
|
|
13 |
% |
|
356.3 |
|
|
311.9 |
|
|
44.4 |
|
|
14 |
% |
Total |
$ |
569.2 |
|
|
$ |
565.4 |
|
|
$ |
3.8 |
|
|
1 |
% |
|
$ |
2,273.2 |
|
|
$ |
2,220.2 |
|
|
$ |
53.0 |
|
|
2 |
% |
|
|
|
Adjusted Segment Earnings before Income
Taxes |
|
Three Months Ended |
|
|
|
|
|
Fiscal Year Ended |
|
|
|
|
|
June 30, |
|
Change |
|
June 30, |
|
Change |
|
2018 |
|
2017 |
|
$ |
|
% |
|
2018 |
|
2017 |
|
$ |
|
% |
Retail Solutions North
America (a) |
$ |
174.4 |
|
|
$ |
159.2 |
|
|
$ |
15.2 |
|
|
10 |
% |
|
$ |
682.0 |
|
|
$ |
606.2 |
|
|
$ |
75.8 |
|
|
13 |
% |
Margin |
43.4 |
% |
|
39.2 |
% |
|
420 bps |
|
|
|
|
|
42.3 |
% |
|
37.9 |
% |
|
440 bps |
|
|
|
|
Advertising North
America (b) |
7.7 |
|
|
12.9 |
|
|
(5.2 |
) |
|
(40 |
)% |
|
37.2 |
|
|
44.4 |
|
|
(7.2 |
) |
|
(16 |
)% |
Margin |
10.3 |
% |
|
16.6 |
% |
|
-630 bps |
|
|
|
|
|
12.2 |
% |
|
14.4 |
% |
|
-220 bps |
|
|
|
|
CDK International
(c) |
27.4 |
|
|
19.9 |
|
|
7.5 |
|
|
38 |
% |
|
97.7 |
|
|
$ |
75.0 |
|
|
22.7 |
|
|
30 |
% |
Margin |
29.8 |
% |
|
24.5 |
% |
|
530 bps |
|
|
|
|
|
27.4 |
% |
|
24.0 |
% |
|
340 bps |
|
|
|
|
Other (d) |
(45.8 |
) |
|
(46.4 |
) |
|
0.6 |
|
|
1 |
% |
|
(174.7 |
) |
|
(137.0 |
) |
|
(37.7 |
) |
|
(28 |
)% |
Total |
$ |
163.7 |
|
|
$ |
145.6 |
|
|
$ |
18.1 |
|
|
12 |
% |
|
$ |
642.2 |
|
|
$ |
588.6 |
|
|
$ |
53.6 |
|
|
9 |
% |
Margin |
28.8 |
% |
|
25.8 |
% |
|
300 bps |
|
|
|
|
|
28.3 |
% |
|
26.5 |
% |
|
180 bps |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) The table below presents a reconciliation of revenues to
constant currency revenues and earnings before income taxes to
constant currency adjusted earnings before income taxes for the
Retail Solutions North America (RSNA) segment.
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
|
Fiscal Year Ended |
|
|
|
|
|
June 30, |
|
Change |
|
June 30, |
|
Change |
|
2018 |
|
2017 |
|
$ |
|
% |
|
2018 |
|
2017 |
|
$ |
|
% |
Revenues |
$ |
402.1 |
|
|
$ |
406.6 |
|
|
$ |
(4.5 |
) |
|
(1 |
)% |
|
$ |
1,611.1 |
|
|
$ |
1,600.7 |
|
|
$ |
10.4 |
|
|
1 |
% |
Impact of
exchange rates |
(1.0 |
) |
|
— |
|
|
|
|
|
|
(4.5 |
) |
|
— |
|
|
|
|
|
Constant currency
revenues (e) |
$ |
401.1 |
|
|
$ |
406.6 |
|
|
$ |
(5.5 |
) |
|
(1 |
)% |
|
$ |
1,606.6 |
|
|
$ |
1,600.7 |
|
|
$ |
5.9 |
|
|
— |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before
income taxes |
$ |
170.0 |
|
|
$ |
158.5 |
|
|
$ |
11.5 |
|
|
7 |
% |
|
$ |
659.0 |
|
|
$ |
605.5 |
|
|
$ |
53.5 |
|
|
9 |
% |
Margin
% |
42.3 |
% |
|
39.0 |
% |
|
330 bps |
|
|
|
|
|
40.9 |
% |
|
37.8 |
% |
|
310 bps |
|
|
|
|
Acquisition and integration-related expenses |
2.4 |
|
|
0.7 |
|
|
|
|
|
|
15.6 |
|
|
0.7 |
|
|
|
|
|
Legal and
regulatory expenses related to competition matters |
2.0 |
|
|
— |
|
|
|
|
|
|
7.4 |
|
|
— |
|
|
|
|
|
Adjusted
earnings before income taxes (e) |
$ |
174.4 |
|
|
$ |
159.2 |
|
|
$ |
15.2 |
|
|
10 |
% |
|
$ |
682.0 |
|
|
$ |
606.2 |
|
|
$ |
75.8 |
|
|
13 |
% |
Adjusted
margin % |
43.4 |
% |
|
39.2 |
% |
|
420 bps |
|
|
|
|
|
42.3 |
% |
|
37.9 |
% |
|
440 bps |
|
|
|
|
Impact of
exchange rates |
(0.6 |
) |
|
— |
|
|
|
|
|
|
(2.4 |
) |
|
— |
|
|
|
|
|
Constant currency
adjusted earnings before income taxes (e) |
$ |
173.8 |
|
|
$ |
159.2 |
|
|
$ |
14.6 |
|
|
9 |
% |
|
$ |
679.6 |
|
|
$ |
606.2 |
|
|
$ |
73.4 |
|
|
12 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b) The table below presents a reconciliation of earnings before
income taxes to adjusted earnings before income taxes for the
Advertising North America (ANA) segment.
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
|
Fiscal Year Ended |
|
|
|
|
|
June 30, |
|
Change |
|
June 30, |
|
Change |
|
2018 |
|
2017 |
|
$ |
|
% |
|
2018 |
|
2017 |
|
$ |
|
% |
Earnings before
income taxes |
$ |
7.6 |
|
|
$ |
12.9 |
|
|
$ |
(5.3 |
) |
|
(41 |
)% |
|
$ |
37.1 |
|
|
$ |
44.4 |
|
|
$ |
(7.3 |
) |
|
(16 |
)% |
Margin
% |
10.1 |
% |
|
16.6 |
% |
|
-650 bps |
|
|
|
|
|
12.1 |
% |
|
14.4 |
% |
|
-230 bps |
|
|
|
Acquisition and integration-related expenses |
0.1 |
|
|
— |
|
|
|
|
|
|
0.1 |
|
|
— |
|
|
|
|
|
Adjusted
earnings before income taxes (e) |
$ |
7.7 |
|
|
$ |
12.9 |
|
|
$ |
(5.2 |
) |
|
(40 |
)% |
|
$ |
37.2 |
|
|
$ |
44.4 |
|
|
$ |
(7.2 |
) |
|
(16 |
)% |
Adjusted
margin % |
10.3 |
% |
|
16.6 |
% |
|
-630 bps |
|
|
|
|
|
12.2 |
% |
|
14.4 |
% |
|
-220 bps |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(c) There are no non-GAAP adjustments to revenues and earnings
before income taxes for the CDK International (CDKI) segment. The
table below presents a reconciliation of revenues to constant
currency revenues and earnings before income taxes to constant
currency earnings before income taxes for the CDKI segment.
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
|
Fiscal Year Ended |
|
|
|
|
|
June 30, |
|
Change |
|
June 30, |
|
Change |
|
2018 |
|
2017 |
|
$ |
|
% |
|
2018 |
|
2017 |
|
$ |
|
% |
Revenues |
$ |
92.1 |
|
|
$ |
81.3 |
|
|
$ |
10.8 |
|
|
13 |
% |
|
$ |
356.3 |
|
|
$ |
311.9 |
|
|
$ |
44.4 |
|
|
14 |
% |
Impact of
exchange rates |
(5.6 |
) |
|
— |
|
|
|
|
|
|
(22.6 |
) |
|
— |
|
|
|
|
|
Constant currency
revenues (e) |
$ |
86.5 |
|
|
$ |
81.3 |
|
|
$ |
5.2 |
|
|
6 |
% |
|
$ |
333.7 |
|
|
$ |
311.9 |
|
|
$ |
21.8 |
|
|
7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before
income taxes |
$ |
27.4 |
|
|
$ |
19.9 |
|
|
$ |
7.5 |
|
|
38 |
% |
|
$ |
97.7 |
|
|
$ |
75.0 |
|
|
$ |
22.7 |
|
|
30 |
% |
Margin
% |
29.8 |
% |
|
24.5 |
% |
|
530 bps |
|
|
|
|
|
27.4 |
% |
|
24.0 |
% |
|
340 bps |
|
|
|
|
Impact of
exchange rates |
(1.3 |
) |
|
— |
|
|
|
|
|
|
(5.3 |
) |
|
— |
|
|
|
|
|
Constant currency
earnings before income taxes (e) |
$ |
26.1 |
|
|
$ |
19.9 |
|
|
$ |
6.2 |
|
|
31 |
% |
|
$ |
92.4 |
|
|
$ |
75.0 |
|
|
$ |
17.4 |
|
|
23 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(d) The table below presents a reconciliation of loss before
income taxes to constant currency adjusted loss before income taxes
for the Other segment.
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
|
Fiscal Year Ended |
|
|
|
|
|
June 30, |
|
Change |
|
June 30, |
|
Change |
|
2018 |
|
2017 |
|
$ |
|
% |
|
2018 |
|
2017 |
|
$ |
|
% |
Loss before
income taxes |
$ |
(68.1 |
) |
|
$ |
(97.2 |
) |
|
$ |
29.1 |
|
|
30 |
% |
|
$ |
(281.8 |
) |
|
$ |
(289.6 |
) |
|
$ |
7.8 |
|
|
3 |
% |
Restructuring expenses |
4.3 |
|
|
8.1 |
|
|
|
|
|
|
20.9 |
|
|
18.4 |
|
|
|
|
|
Other
business transformation expenses |
10.2 |
|
|
18.9 |
|
|
|
|
|
|
50.3 |
|
|
78.1 |
|
|
|
|
|
Total
stock-based compensation |
7.8 |
|
|
23.1 |
|
|
|
|
|
|
35.7 |
|
|
55.4 |
|
|
|
|
|
Officer
transition expense |
— |
|
|
0.7 |
|
|
|
|
|
|
0.6 |
|
|
0.7 |
|
|
|
|
|
Tax
matters indemnification gain, net |
— |
|
|
— |
|
|
|
|
|
|
(0.4 |
) |
|
— |
|
|
|
|
|
Adjusted loss
before income taxes (e) |
$ |
(45.8 |
) |
|
$ |
(46.4 |
) |
|
$ |
0.6 |
|
|
1 |
% |
|
$ |
(174.7 |
) |
|
$ |
(137.0 |
) |
|
$ |
(37.7 |
) |
|
(28 |
)% |
Impact of
exchange rates |
0.1 |
|
|
— |
|
|
|
|
|
|
(0.8 |
) |
|
— |
|
|
|
|
|
Constant currency
adjusted loss before income taxes (e) |
$ |
(45.7 |
) |
|
$ |
(46.4 |
) |
|
$ |
0.7 |
|
|
2 |
% |
|
$ |
(175.5 |
) |
|
$ |
(137.0 |
) |
|
$ |
(38.5 |
) |
|
(28 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(e) Refer to the Non-GAAP Financial Measures section of this
press release for additional information on our non-GAAP
adjustments.
CDK Global, Inc.Consolidated Adjusted
Financial Information(In millions, except per share
amounts)(Unaudited)
As described below under the Non-GAAP Financial Measures section
of this press release, effective July 1, 2017, we began
incorporating additional adjustments within our calculations of
adjusted earnings before income taxes, where management has deemed
it appropriate to better reflect our underlying operations.
Information for the three months and year ended June 30, 2017 has
been restated to exclude stock-based compensation from adjusted
earnings before income taxes, adjusted provision for income taxes,
adjusted net earnings attributable to CDK, and adjusted net
earnings attributable to CDK per share to conform to the new
presentation.
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
|
Fiscal Year Ended |
|
|
|
|
|
June 30, |
|
Change |
|
June 30, |
|
Change |
|
2018 |
|
2017 |
|
$ |
|
% |
|
2018 |
|
2017 |
|
$ |
|
% |
Revenues |
$ |
569.2 |
|
|
$ |
565.4 |
|
|
$ |
3.8 |
|
|
1 |
% |
|
$ |
2,273.2 |
|
|
$ |
2,220.2 |
|
|
$ |
53.0 |
|
|
2 |
% |
Impact of
exchange rates |
(6.6 |
) |
|
— |
|
|
|
|
|
|
(27.1 |
) |
|
— |
|
|
|
|
|
Constant currency
revenues (a) |
$ |
562.6 |
|
|
$ |
565.4 |
|
|
$ |
(2.8 |
) |
|
— |
% |
|
$ |
2,246.1 |
|
|
$ |
2,220.2 |
|
|
$ |
25.9 |
|
|
1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before
income taxes |
$ |
136.9 |
|
|
$ |
94.1 |
|
|
$ |
42.8 |
|
|
45 |
% |
|
$ |
512.0 |
|
|
$ |
435.3 |
|
|
$ |
76.7 |
|
|
18 |
% |
Margin |
24.1 |
% |
|
16.6 |
% |
|
750 bps |
|
|
|
|
22.5 |
% |
|
19.6 |
% |
|
290 bps |
|
|
|
Restructuring expenses |
4.3 |
|
|
8.1 |
|
|
|
|
|
|
20.9 |
|
|
18.4 |
|
|
|
|
|
Other
business transformation expenses (b) |
10.2 |
|
|
18.9 |
|
|
|
|
|
|
50.3 |
|
|
78.1 |
|
|
|
|
|
Total
stock-based compensation |
7.8 |
|
|
23.1 |
|
|
|
|
|
|
35.7 |
|
|
55.4 |
|
|
|
|
|
Acquisition and integration-related expenses |
2.5 |
|
|
0.7 |
|
|
|
|
|
|
15.7 |
|
|
0.7 |
|
|
|
|
|
Officer
transition expense (b) |
— |
|
|
0.7 |
|
|
|
|
|
|
0.6 |
|
|
0.7 |
|
|
|
|
|
Legal and
regulatory expenses related to competition matters |
2.0 |
|
|
— |
|
|
|
|
|
|
7.4 |
|
|
— |
|
|
|
|
|
Tax
matters indemnification gain, net |
— |
|
|
— |
|
|
|
|
|
|
(0.4 |
) |
|
— |
|
|
|
|
|
Adjusted
earnings before income taxes (a) |
$ |
163.7 |
|
|
$ |
145.6 |
|
|
$ |
18.1 |
|
|
12 |
% |
|
$ |
642.2 |
|
|
$ |
588.6 |
|
|
$ |
53.6 |
|
|
9 |
% |
Adjusted
margin |
28.8 |
% |
|
25.8 |
% |
|
300 bps |
|
|
|
|
28.3 |
% |
|
26.5 |
% |
|
180 bps |
|
|
|
Impact of
exchange rates |
(1.8 |
) |
|
— |
|
|
|
|
|
|
(8.5 |
) |
|
— |
|
|
|
|
|
Constant currency
adjusted earnings before income taxes (a) |
$ |
161.9 |
|
|
$ |
145.6 |
|
|
$ |
16.3 |
|
|
11 |
% |
|
$ |
633.7 |
|
|
$ |
588.6 |
|
|
$ |
45.1 |
|
|
8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for
income taxes |
$ |
35.3 |
|
|
$ |
33.2 |
|
|
$ |
2.1 |
|
|
6 |
% |
|
$ |
123.3 |
|
|
$ |
132.8 |
|
|
$ |
(9.5 |
) |
|
(7 |
)% |
Effective
tax rate |
25.8 |
% |
|
35.3 |
% |
|
|
|
|
|
24.1 |
% |
|
30.5 |
% |
|
|
|
|
Income
tax effect of pre-tax adjustments |
7.8 |
|
|
18.5 |
|
|
|
|
|
|
39.7 |
|
|
55.5 |
|
|
|
|
|
Excess
tax benefit from stock-based compensation |
0.1 |
|
|
1.0 |
|
|
|
|
|
|
5.1 |
|
|
13.1 |
|
|
|
|
|
Pre
spin-off filed tax return adjustment |
— |
|
|
— |
|
|
|
|
|
|
0.4 |
|
|
— |
|
|
|
|
|
Impact of
U.S. tax reform act |
3.6 |
|
|
— |
|
|
|
|
|
|
18.5 |
|
|
— |
|
|
|
|
|
Adjusted
provision for income taxes (a) |
$ |
46.8 |
|
|
$ |
52.7 |
|
|
$ |
(5.9 |
) |
|
(11 |
)% |
|
$ |
187.0 |
|
|
$ |
201.4 |
|
|
$ |
(14.4 |
) |
|
(7 |
)% |
Adjusted
effective tax rate |
28.6 |
% |
|
36.2 |
% |
|
|
|
|
|
29.1 |
% |
|
34.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
earnings |
$ |
101.6 |
|
|
$ |
60.9 |
|
|
$ |
40.7 |
|
|
67 |
% |
|
$ |
388.7 |
|
|
$ |
302.5 |
|
|
$ |
86.2 |
|
|
28 |
% |
Less: net earnings
attributable to noncontrolling interest |
2.2 |
|
|
2.2 |
|
|
|
|
|
|
7.9 |
|
|
6.9 |
|
|
|
|
|
Net earnings
attributable to CDK |
99.4 |
|
|
58.7 |
|
|
40.7 |
|
|
69 |
% |
|
380.8 |
|
|
295.6 |
|
|
85.2 |
|
|
29 |
% |
Restructuring expenses (c) |
4.3 |
|
|
8.1 |
|
|
|
|
|
|
20.6 |
|
|
18.4 |
|
|
|
|
|
Other
business transformation expenses (b) (c) |
10.1 |
|
|
18.9 |
|
|
|
|
|
|
50.0 |
|
|
78.1 |
|
|
|
|
|
Total
stock-based compensation (c) |
7.8 |
|
|
23.1 |
|
|
|
|
|
|
35.6 |
|
|
55.4 |
|
|
|
|
|
Acquisition and integration-related expenses |
2.5 |
|
|
0.7 |
|
|
|
|
|
|
15.7 |
|
|
0.7 |
|
|
|
|
|
Officer
transition expense |
— |
|
|
0.7 |
|
|
|
|
|
|
0.6 |
|
|
0.7 |
|
|
|
|
|
Legal and
regulatory expenses related to competition matters |
2.0 |
|
|
— |
|
|
|
|
|
|
7.4 |
|
|
— |
|
|
|
|
|
Tax
matters indemnification gain, net |
— |
|
|
— |
|
|
|
|
|
|
(0.4 |
) |
|
— |
|
|
|
|
|
Income
tax effect of pre-tax adjustments |
(7.8 |
) |
|
(18.5 |
) |
|
|
|
|
|
(39.7 |
) |
|
(55.5 |
) |
|
|
|
|
Excess
tax benefit from stock-based compensation |
(0.1 |
) |
|
(1.0 |
) |
|
|
|
|
|
(5.1 |
) |
|
(13.1 |
) |
|
|
|
|
Pre
spin-off filed tax return adjustment |
— |
|
|
— |
|
|
|
|
|
|
(0.4 |
) |
|
— |
|
|
|
|
|
Impact of
U.S. tax reform act |
(3.6 |
) |
|
— |
|
|
|
|
|
|
(18.5 |
) |
|
— |
|
|
|
|
|
Adjusted net
earnings attributable to CDK (a) |
$ |
114.6 |
|
|
$ |
90.7 |
|
|
$ |
23.9 |
|
|
26 |
% |
|
$ |
446.6 |
|
|
$ |
380.3 |
|
|
$ |
66.3 |
|
|
17 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
earnings attributable to CDK per share |
$ |
0.75 |
|
|
$ |
0.41 |
|
|
$ |
0.34 |
|
|
83 |
% |
|
2.78 |
|
|
1.99 |
|
|
$ |
0.79 |
|
|
40 |
% |
Restructuring expenses (c) |
0.03 |
|
|
0.06 |
|
|
|
|
|
|
0.15 |
|
|
0.12 |
|
|
|
|
|
Other
business transformation expenses (b) (c) |
0.08 |
|
|
0.14 |
|
|
|
|
|
|
0.37 |
|
|
0.54 |
|
|
|
|
|
Total
stock-based compensation (c) |
0.06 |
|
|
0.16 |
|
|
|
|
|
|
0.26 |
|
|
0.37 |
|
|
|
|
|
Acquisition and integration-related expenses |
0.02 |
|
|
— |
|
|
|
|
|
|
0.12 |
|
|
— |
|
|
|
|
|
Officer
transition expense |
— |
|
|
— |
|
|
|
|
|
|
— |
|
|
— |
|
|
|
|
|
Legal and
regulatory expenses related to competition matters |
0.02 |
|
|
— |
|
|
|
|
|
|
0.05 |
|
|
— |
|
|
|
|
|
Tax
matters indemnification gain, net |
— |
|
|
— |
|
|
|
|
|
|
— |
|
|
— |
|
|
|
|
|
Income
tax effect of pre-tax adjustments |
(0.06 |
) |
|
(0.13 |
) |
|
|
|
|
|
(0.29 |
) |
|
(0.37 |
) |
|
|
|
|
Excess
tax benefit from stock-based compensation |
— |
|
|
(0.01 |
) |
|
|
|
|
|
(0.04 |
) |
|
(0.08 |
) |
|
|
|
|
Pre
spin-off filed tax return adjustment |
— |
|
|
— |
|
|
|
|
|
|
— |
|
|
— |
|
|
|
|
|
Impact of
U.S. tax reform act |
(0.03 |
) |
|
— |
|
|
|
|
|
|
(0.14 |
) |
|
— |
|
|
|
|
|
Adjusted
diluted earnings attributable to CDK per share |
$ |
0.87 |
|
|
$ |
0.63 |
|
|
$ |
0.24 |
|
|
38 |
% |
|
3.26 |
|
|
2.57 |
|
|
$ |
0.69 |
|
|
27 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common
shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted |
132.4 |
|
|
144.5 |
|
|
|
|
|
|
136.8 |
|
|
148.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
|
Fiscal Year Ended |
|
|
|
|
|
June 30, |
|
Change |
|
June 30, |
|
Change |
|
2018 |
|
2017 |
|
$ |
|
% |
|
2018 |
|
2017 |
|
$ |
|
% |
Net earnings
attributable to CDK |
$ |
99.4 |
|
|
$ |
58.7 |
|
|
$ |
40.7 |
|
|
69 |
% |
|
$ |
380.8 |
|
|
$ |
295.6 |
|
|
$ |
85.2 |
|
|
29 |
% |
Margin |
17.5 |
% |
|
10.4 |
% |
|
710 bps |
|
|
|
|
16.8 |
% |
|
13.3 |
% |
|
350 bps |
|
|
|
Net
earnings attributable to noncontrolling interest |
2.2 |
|
|
2.2 |
|
|
|
|
|
|
7.9 |
|
|
6.9 |
|
|
|
|
|
Provision
for income taxes |
35.3 |
|
|
33.2 |
|
|
|
|
|
|
123.3 |
|
|
132.8 |
|
|
|
|
|
Interest
expense |
25.3 |
|
|
19.1 |
|
|
|
|
|
|
95.9 |
|
|
57.2 |
|
|
|
|
|
Depreciation and amortization |
20.5 |
|
|
18.3 |
|
|
|
|
|
|
79.1 |
|
|
70.3 |
|
|
|
|
|
Total
stock-based compensation |
7.8 |
|
|
23.1 |
|
|
|
|
|
|
35.7 |
|
|
55.4 |
|
|
|
|
|
Restructuring expenses |
4.3 |
|
|
8.1 |
|
|
|
|
|
|
20.9 |
|
|
18.4 |
|
|
|
|
|
Other
business transformation expenses |
10.2 |
|
|
18.7 |
|
|
|
|
|
|
50.1 |
|
|
75.6 |
|
|
|
|
|
Acquisition and integration-related expenses |
2.5 |
|
|
0.7 |
|
|
|
|
|
|
15.7 |
|
|
0.7 |
|
|
|
|
|
Officer
transition expense |
— |
|
|
0.7 |
|
|
|
|
|
|
0.6 |
|
|
0.7 |
|
|
|
|
|
Legal and
regulatory expenses related to competition matters |
2.0 |
|
|
— |
|
|
|
|
|
|
7.4 |
|
|
— |
|
|
|
|
|
Tax
matters indemnification gain, net |
— |
|
|
— |
|
|
|
|
|
|
(0.4 |
) |
|
— |
|
|
|
|
|
Adjusted EBITDA
(a) |
$ |
209.5 |
|
|
$ |
182.8 |
|
|
$ |
26.7 |
|
|
15 |
% |
|
$ |
817.0 |
|
|
$ |
713.6 |
|
|
$ |
103.4 |
|
|
14 |
% |
Adjusted
margin |
36.8 |
% |
|
32.3 |
% |
|
450 bps |
|
|
|
|
35.9 |
% |
|
32.1 |
% |
|
380 bps |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended |
|
June 30, |
|
2018 |
|
2017 |
Net cash flows
provided by operating activities |
$ |
461.6 |
|
|
$ |
431.0 |
|
Capital
expenditures |
(46.0 |
) |
|
(62.4 |
) |
Capitalized
software |
(41.1 |
) |
|
(31.8 |
) |
Free cash flow
(a) |
$ |
374.5 |
|
|
$ |
336.8 |
|
|
|
|
|
|
|
|
|
(a) Refer to the Non-GAAP Financial Measures section of this
press release for additional information on our non-GAAP
adjustments.
(b) Stock-based compensation expense has been removed from
business transformation and officer transition expense for the
three months and year ended June 30, 2017. Refer to the Non-GAAP
Financial Measures section of this press release for additional
information on changes to our non-GAAP adjustments.
(c) The portion of expense related to noncontrolling interest
has been removed from restructuring expenses, business
transformation expense, and stock-based compensation for the three
months and year ended June 30, 2018.
CDK Global, Inc.Consolidated Fiscal
2019 Guidance(In millions, except per share
amounts)(Unaudited)
As described below under the Non-GAAP Financial Measures section
of this press release, effective July 1, 2018 and commencing with
fiscal 2019 guidance, we will adjust for amortization of acquired
intangible assets within our calculations of adjusted earnings
before income taxes, adjusted provision for income taxes, adjusted
net earnings attributable to CDK, and adjusted diluted net earnings
attributable to CDK per share. The table below includes these
adjustments for fiscal 2018 for purposes of calculating and
presenting the fiscal 2019 guidance.
|
|
|
|
|
Fiscal 2018 |
|
Fiscal 2019 under ASC 605 (a) |
|
Actuals |
|
Point Estimate (b) |
|
Guidance |
Revenues |
$ |
2,273.2 |
|
|
$ |
2,275.0 |
|
|
Increase (1) - 1% |
|
|
|
|
|
|
Earnings before
income taxes |
$ |
512.0 |
|
|
$ |
561.0 |
|
|
|
Restructuring expenses |
20.9 |
|
|
38.0 |
|
|
|
Other
business transformation expenses |
50.3 |
|
|
27.0 |
|
|
|
Total
stock-based compensation |
35.7 |
|
|
31.0 |
|
|
|
Amortization of acquired intangible assets |
15.9 |
|
|
14.0 |
|
|
|
Acquisition and integration-related expenses |
15.7 |
|
|
1.0 |
|
|
|
Officer
transition expense |
0.6 |
|
|
— |
|
|
|
Legal and
regulatory expenses related to competition matters |
7.4 |
|
|
15.0 |
|
|
|
Tax
matters indemnification gain, net |
(0.4 |
) |
|
— |
|
|
|
Adjusted
earnings before income taxes (c) |
$ |
658.1 |
|
|
$ |
687.0 |
|
|
|
|
|
|
|
|
|
Provision for
income taxes |
$ |
123.3 |
|
|
$ |
143.0 |
|
|
|
Effective
tax rate |
24.1 |
% |
|
25.5 |
% |
|
25 -
26% |
Income
tax effect of pre-tax adjustments |
44.3 |
|
|
30.0 |
|
|
|
Excess
tax benefit from stock-based compensation |
5.1 |
|
|
4.0 |
|
|
|
Pre
spin-off filed tax return adjustment |
0.4 |
|
|
— |
|
|
|
Impact of
U.S. tax reform act |
18.5 |
|
|
— |
|
|
|
Adjusted
provision for income taxes (c) |
$ |
191.6 |
|
|
$ |
177.0 |
|
|
|
Adjusted effective tax rate |
29.1 |
% |
|
25.8 |
% |
|
25 -
26% |
|
|
|
|
|
|
Net
earnings |
$ |
388.7 |
|
|
$ |
418.0 |
|
|
|
Less: net earnings
attributable to noncontrolling interest |
7.9 |
|
|
8.0 |
|
|
|
Net earnings
attributable to CDK |
$ |
380.8 |
|
|
$ |
410.0 |
|
|
|
Restructuring expenses |
20.6 |
|
|
38.0 |
|
|
|
Other
business transformation expenses |
50.0 |
|
|
27.0 |
|
|
|
Total
stock-based compensation |
35.6 |
|
|
31.0 |
|
|
|
Amortization of acquired intangible assets |
15.7 |
|
|
14.0 |
|
|
|
Acquisition and integration-related expenses |
15.7 |
|
|
1.0 |
|
|
|
Officer
transition expense |
0.6 |
|
|
— |
|
|
|
Legal and
regulatory expenses related to competition matters |
7.4 |
|
|
15.0 |
|
|
|
Tax
matters indemnification gain, net |
(0.4 |
) |
|
— |
|
|
|
Income
tax effect of pre-tax adjustments |
(44.3 |
) |
|
(30.0 |
) |
|
|
Excess
tax benefit from stock-based compensation |
(5.1 |
) |
|
(4.0 |
) |
|
|
Pre
spin-off filed tax return adjustment |
(0.4 |
) |
|
— |
|
|
|
Impact of
U.S. tax reform act |
(18.5 |
) |
|
— |
|
|
|
Adjusted net
earnings attributable to CDK (c) |
$ |
457.7 |
|
|
$ |
502.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net
earnings attributable to CDK per share |
$ |
2.78 |
|
|
$ |
3.23 |
|
|
$3.20
- 3.30 |
Growth
% |
|
|
|
|
Increase 15 - 19% |
Restructuring expenses |
0.15 |
|
|
0.30 |
|
|
|
Other
business transformation expenses |
0.37 |
|
|
0.21 |
|
|
|
Total
stock-based compensation |
0.26 |
|
|
0.24 |
|
|
|
Amortization of acquired intangible assets |
0.12 |
|
|
0.11 |
|
|
|
Acquisition and integration-related expenses |
0.12 |
|
|
0.01 |
|
|
|
Officer
transition expense |
— |
|
|
— |
|
|
|
Legal and
regulatory expenses related to competition matters |
0.05 |
|
|
0.12 |
|
|
|
Tax
matters indemnification gain, net |
— |
|
|
— |
|
|
|
Income
tax effect of pre-tax adjustments |
(0.32 |
) |
|
(0.24 |
) |
|
|
Excess
tax benefit from stock-based compensation |
(0.04 |
) |
|
(0.03 |
) |
|
|
Pre
spin-off filed tax return adjustment |
— |
|
|
— |
|
|
|
Impact of
U.S. tax reform act |
(0.14 |
) |
|
— |
|
|
|
Adjusted
diluted net earnings attributable to CDK per share
(c) |
$ |
3.35 |
|
|
$ |
3.95 |
|
|
$3.85
- 3.95 |
Growth
% |
|
|
|
|
Increase 15 - 18% |
|
|
|
|
|
|
|
|
|
|
|
Fiscal 2018 |
|
Fiscal 2019 under ASC 605 (a) |
|
Actuals |
|
Point Estimate (b) |
|
Guidance |
Revenues |
$ |
2,273.2 |
|
|
$ |
2,275.0 |
|
|
|
|
|
|
|
|
|
Net earnings
attributable to CDK |
$ |
380.8 |
|
|
$ |
410.0 |
|
|
Increase 6 - 10 % |
Margin |
16.8 |
% |
|
18.0 |
% |
|
17.5 -
18.5% |
Net
earnings attributable to noncontrolling interest |
7.9 |
|
|
8.0 |
|
|
|
Provision
for income taxes |
123.3 |
|
|
143.0 |
|
|
|
Interest
expense |
95.9 |
|
|
135.0 |
|
|
|
Depreciation and amortization |
79.1 |
|
|
92.0 |
|
|
|
Total
stock-based compensation |
35.7 |
|
|
31.0 |
|
|
|
Restructuring expenses |
20.9 |
|
|
38.0 |
|
|
|
Other
business transformation expenses |
50.1 |
|
|
27.0 |
|
|
|
Acquisition and integration-related expenses |
15.7 |
|
|
1.0 |
|
|
|
Officer
transition expense |
0.6 |
|
|
— |
|
|
|
Legal and
regulatory expenses related to competition matters |
7.4 |
|
|
15.0 |
|
|
|
Tax
matters indemnification gain, net |
(0.4 |
) |
|
— |
|
|
|
Adjusted EBITDA
(c) |
$ |
817.0 |
|
|
$ |
900.0 |
|
|
Increase 8 - 12 % |
Adjusted
margin |
35.9 |
% |
|
39.6 |
% |
|
39 -
40% |
|
|
|
|
|
|
|
|
(a) The guidance provided does not reflect the impact of our
adoption of ASC 2014-09 “Revenue from Contracts with Customers”
(“ASC 606”), which we are adopting for fiscal year 2019. Our
assessment for fiscal 2019 is ongoing and subject to finalization,
and therefore we will not provide guidance on the ASC 606 basis at
this time.
(b) The point estimates are arbitrary amounts within the
guidance ranges provided and are not meant to represent CDK's
forecast of actual results. They are used solely to provide a means
to reconcile each non-GAAP guidance range to the most directly
comparable GAAP measure in dollars and percentages, where
applicable.
(c) Refer to the Non-GAAP Financial Measures section of this
press release for additional information on our non-GAAP
adjustments.
CDK Global, Inc.Performance
Metrics(Unaudited)
CDK management regularly reviews the following key performance
measures to evaluate business results and make operating and
strategic decisions. These measures are intended to provide
directional information regarding trends in our recurring
subscription revenues. The following table summarizes these
measures for recurring subscription revenues in our segments:
|
|
|
For the three months ended |
|
September 30,2016 (a) |
|
December 31,2016 (a) |
|
March 31,2017 (a) |
|
June 30,2017 (a) |
|
September 30, 2017 |
|
December 31, 2017 |
|
March 31, 2018 |
|
June 30, 2018 |
RSNA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Automotive |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DMS
Customer Sites (b) |
9,232 |
|
|
9,184 |
|
|
9,157 |
|
|
9,081 |
|
|
9,020 |
|
|
9,029 |
|
|
8,917 |
|
|
8,933 |
|
Avg
Revenue Per Site (c) |
$ |
7,803 |
|
|
$ |
7,875 |
|
|
$ |
7,975 |
|
|
$ |
8,070 |
|
|
$ |
8,285 |
|
|
$ |
8,410 |
|
|
$ |
8,483 |
|
|
$ |
8,594 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjacencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DMS
Customer Sites (b) |
5,380 |
|
|
5,415 |
|
|
5,523 |
|
|
5,530 |
|
|
5,523 |
|
|
5,577 |
|
|
5,613 |
|
|
5,624 |
|
Avg
Revenue Per Site (c) |
$ |
1,556 |
|
|
$ |
1,569 |
|
|
$ |
1,575 |
|
|
$ |
1,578 |
|
|
$ |
1,602 |
|
|
$ |
1,600 |
|
|
$ |
1,619 |
|
|
$ |
1,646 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total RSNA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DMS
Customer Sites (b) |
14,612 |
|
|
14,599 |
|
|
14,680 |
|
|
14,611 |
|
|
14,543 |
|
|
14,606 |
|
|
14,530 |
|
|
14,557 |
|
Avg
Revenue Per Site (c) |
$ |
5,507 |
|
|
$ |
5,538 |
|
|
$ |
5,570 |
|
|
$ |
5,616 |
|
|
$ |
5,750 |
|
|
$ |
5,814 |
|
|
$ |
5,836 |
|
|
$ |
5,913 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Websites (d) |
6,625 |
|
|
6,789 |
|
|
6,931 |
|
|
6,879 |
|
|
6,858 |
|
|
6,817 |
|
|
6,801 |
|
|
6,953 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CDKI |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DMS
Customer Sites (b) |
13,373 |
|
|
13,424 |
|
|
13,419 |
|
|
13,477 |
|
|
13,496 |
|
|
13,559 |
|
|
13,537 |
|
|
13,274 |
|
Avg
Revenue Per site (c) |
$ |
1,181 |
|
|
$ |
1,199 |
|
|
$ |
1,226 |
|
|
$ |
1,249 |
|
|
$ |
1,266 |
|
|
$ |
1,290 |
|
|
$ |
1,310 |
|
|
$ |
1,339 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Average revenue per Dealer Management System (DMS) customer
site has been updated for fiscal 2017 to reflect budgeted foreign
exchange rates for fiscal 2018.
(b) DMS Customer Sites - We track the number of retail customer
sites with an active DMS that sell vehicles in the automotive and
adjacent markets as an indicator of our opportunity set for
generating subscription revenue. We consider a DMS to be active if
we have billed a subscription fee for that solution during the most
recently ended calendar month. Adjacent markets include heavy truck
dealerships that provide vehicles to the over-the-road trucking
industry, recreation dealerships in the motorcycle, marine, and
recreational vehicle industries, and heavy equipment dealerships in
the agriculture and construction equipment industries.
(c) Average Revenue Per DMS Customer Site - Average revenue per
DMS customer site is an indicator of the adoption of our solutions
by DMS customers, and we monitor changes in this metric to measure
the effectiveness of our strategy to deepen our relationships with
our current customer base through upgrading and expanding
solutions. We calculate average revenue per DMS customer site by
dividing revenue generated from our solutions, including revenue
generated from websites, in an applicable period by the average
number of DMS customer sites in the same period. The metric
excludes subscription revenue generated by customers not included
in our DMS customer site count as well as subscription revenue
related to certain installation and training activities that is
deferred then recognized as revenue over the life of the contract.
Revenue underlying this metric is based on budgeted foreign
exchange rates. When we discuss growth in average revenue per DMS
customer site, revenue for the comparable prior period has been
adjusted to reflect budgeted foreign exchange rates for the current
period.
(d) Websites - For the RSNA segment, we track the number of
websites that we host and develop for our OEM and automotive retail
customers as an indicator of business activity, regardless of
whether or not the website is tied to a DMS customer site. The
number of websites as of a specified date is the total number of
full function dealer websites or portals that are currently
accessible as of the end of the most recent calendar month.
Non-GAAP Financial Measures
We disclose certain financial measures for our consolidated and
operating segment results on both a GAAP and a non-GAAP (adjusted)
basis. The non-GAAP financial measures disclosed should be viewed
in addition to, and not as an alternative to, results prepared in
accordance with GAAP. Our use of each of the following
non-GAAP financial measures may differ from similarly titled
non-GAAP financial measures presented by other companies, and other
companies may not define these non-GAAP financial measures, or
reconcile them to the comparable GAAP financial measures, in the
same way.
|
|
Non-GAAP Financial Measure |
Comparable GAAP Financial Measure |
Adjusted earnings
before income taxes |
Earnings before income
taxes |
Adjusted provision for
income taxes |
Provision for income
taxes |
Adjusted net earnings
attributable to CDK |
Net earnings
attributable to CDK |
Adjusted diluted
earnings attributable to CDK per share |
Diluted earnings
attributable to CDK per share |
Adjusted EBITDA |
Net earnings
attributable to CDK |
Adjusted EBITDA
margin |
Net earnings
attributable to CDK margin |
Constant currency
revenues |
Revenues |
Constant currency
adjusted earnings before income taxes |
Earnings before income
taxes |
Free cash flow |
Net cash flows provided
by operating activities |
|
|
We use adjusted earnings before income taxes, adjusted provision
for income taxes, adjusted net earnings attributable to CDK,
adjusted diluted earnings attributable to CDK per share, adjusted
EBITDA and adjusted EBITDA margin internally to evaluate our
performance on a consistent basis, because the measures adjust for
the impact of certain items that we believe do not directly reflect
our underlying operations. By adjusting for these items we believe
we have more precise inputs for use as factors in (i) our budgeting
process, (ii) making financial and operational decisions, (iii)
evaluating ongoing segment and overall operating performance on a
consistent period-to-period basis and relative to our competitors,
(iv) target leverage calculations, (v) debt covenant calculations,
and (vi) determining incentive-based compensation.
We believe our non-GAAP financial measures are helpful to users
of the financial statements because they (i) provide investors with
meaningful supplemental information regarding financial performance
by excluding certain items, (ii) permit investors to view
performance using the same tools that management uses, and (iii)
otherwise provide supplemental information that may be useful to
investors in evaluating our ongoing operating results on a
consistent basis. We believe that the presentation of these
non-GAAP financial measures, when considered in addition to the
corresponding GAAP financial measures and the reconciliations to
those measures disclosed below, provides investors with a fuller
understanding of the factors and trends affecting our business than
could be obtained absent these disclosures.
Effective July 1, 2017, we began incorporating additional
adjustments within our calculations of adjusted earnings before
income taxes, adjusted provision for income taxes, adjusted net
earnings attributable to CDK, adjusted diluted net earnings
attributable to CDK per share, adjusted EBITDA, and adjusted EBITDA
margin where management has deemed it appropriate to better reflect
our underlying operations. For fiscal 2018, management modified
fiscal year ended June 30, 2017 adjustments for (i) business
transformation expenses and (ii) officer transition expense to
remove stock-based compensation expense of $2.5 million and $3.1
million, respectively, since we began excluding stock-based
compensation expense from the measures, and excluded certain legal
and regulatory expenses related to the competition matter from
adjusted earnings before income taxes.
Effective July 1, 2018 and commencing with fiscal 2019 guidance,
we will adjust for amortization of acquired intangible assets
within our calculations of adjusted earnings before income taxes,
adjusted net earnings attributable to CDK, and adjusted diluted net
earnings attributable to CDK per share. Amortization of acquired
intangible assets represents non-cash expenses associated with
acquisition activities that we expect to become more meaningful due
to our evolving acquisition strategy. These expenses are
inconsistent in amount and frequency and are significantly affected
by the timing and size of our acquisitions. Therefore, we will
adjust for amortization of acquired intangible assets within our
calculations of these measures because it does not directly reflect
our underlying operations, and excluding such information provides
us with a better understanding of our ongoing operating performance
across periods.
We are unable to reconcile our long-term fiscal 2020 and
beyond growth outlook of adjusted EBITDA and adjusted diluted
earnings attributable to CDK per share without unreasonable efforts
because the additional information necessary to calculate such
measure on a GAAP basis is unavailable or dependent on the timing
of future events outside of our control. Therefore, because of the
uncertainty and variability of the nature of the amount of future
adjustments, which could be significant, no reconciliation is being
provided at this time.
Adjusted Earnings before Income Taxes
For fiscal 2018, management has excluded the following items
from adjusted earnings before income taxes for the periods
presented:
- Restructuring expenses recognized in connection with our
business transformation plan.
- Other business transformation expenses included within cost of
revenues and selling, general and administrative expenses.
- Total stock-based compensation expense included within cost of
revenues and selling, general and administrative expenses.
- Acquisition and integration-related expenses that include
legal, accounting, other professional fees, and other integration
costs incurred in connection with assessment and integration of
acquisitions included within selling, general and administrative
expenses.
- Officer transition expense includes severance expense in
connection with officer departures included within selling, general
and administrative expenses for the periods presented.
- Legal and regulatory expenses related to competition matters
included within selling, general and administrative expenses.
- Net loss/(gain) recorded within other income, net associated
with an indemnification receivable from ADP for pre spin-off tax
periods in accordance with tax matters agreement.
For fiscal 2019, management will modify the fiscal 2018
adjustments for amortization of acquired intangible assets from
adjusted earnings before income taxes as follows:
- Amortization of acquired intangible assets consists of
amortization of intangible assets such as customer lists, purchased
software, and trademarks acquired in connection with business
combinations.
Adjusted Provision for Income taxes
Management has excluded the following items from adjusted
provision for income taxes for the periods presented:
- Income tax effect of pre-tax adjustments described above.
- Excess tax benefit derived from stock-option exercises and
vesting of restricted stock in order to align the adjustments for
this measure with our adjustments for total stock-based
compensation in other measures.
- Net income tax benefit associated with a tax refund, offset by
a pretax loss to establish a liability to ADP for the tax refund in
accordance with the tax-matters agreement.
- As a result of the Tax Reform Act, an estimated one-time tax
benefit of $26.2 million from the revaluation of the Company's net
deferred tax liability partially offset by a one-time expense of
$7.7 million associated with undistributed foreign earnings.
Adjusted Net Earnings Attributable to CDK and Adjusted Diluted
Net Earnings Attributable to CDK per Share
For each respective presentation, management has excluded the
items described above for adjusted earnings before income taxes and
adjusted provision for income taxes from adjusted net earnings
attributable to CDK and adjusted basic and diluted net earnings
attributable to CDK per share.
The portion of expense related to noncontrolling interest of
$0.3 million has been removed from restructuring expenses for the
year ended June 30, 2018 and $0.1 million and $0.3 million has been
removed from other business transformation expenses for the three
months ended and year ended June 30, 2018, respectively.
Additionally, $0.1 million related to noncontrolling interest has
been removed from stock-based compensation for the year ended
June 30, 2018.
Adjusted EBITDA
Management has excluded the following items from net earnings
attributable to CDK in order to calculate adjusted EBITDA for the
periods presented:
- Net earnings attributable to noncontrolling interest included
within the financial statements for the periods presented.
- Provision for income taxes included within the financial
statements for the periods presented.
- Interest expense included within the financial statements for
the periods presented.
- Depreciation and amortization included within the financial
statements for the periods presented.
- Total stock-based compensation expense included within cost of
revenues and selling, general and administrative expenses.
- Restructuring expenses recognized in connection with our
business transformation plan for the periods presented.
- Other business transformation expenses were included within
cost of revenues and selling, general and administrative expenses
and were incurred in connection with our business transformation
plan for the fiscal year ended June 30, 2018 and 2017. Other
business transformation expenses excludes accelerated depreciation
of $0.2 million for the three months ended June 30, 2017, and $0.2
million and $2.5 million for the fiscal year ended June 30,
2018 and 2017, respectively.
- Acquisition and integration-related expenses that include
legal, accounting, other professional fees, and other integration
costs incurred in connection with assessment and integration of
acquisitions included within selling, general and administrative
expenses.
- Officer transition expense includes severance expense in
connection with officer departures is included within selling,
general and administrative expenses for the periods presented.
- Legal and regulatory expenses related to competition matters
included within selling, general and administrative expenses.
- Net loss/(gain) recorded within other income, net associated
with an indemnification receivable from ADP for pre spin-off tax
periods in accordance with tax matters agreement.
Free Cash Flow
We also review free cash flow to measure our ability to generate
additional cash from our business operations. Free cash flow is
defined as cash flow from operating activities less amounts paid
for capital expenditures and capitalized software. Free cash flow
should be considered in addition to, rather than as a substitute
for consolidated net income as a measure of our performance and net
cash provided by operating activities as a measure of our
liquidity.
Constant Currency
We use constant currency revenues and constant currency adjusted
earnings before income taxes to review revenues and adjusted
earnings before income taxes for our consolidated and operating
segment results on a constant currency basis to understand
underlying business trends. To present these results on a constant
currency basis, current period results for entities reporting in
currencies other than the U.S. dollar were translated into U.S.
dollar using the average monthly exchange rates for the comparable
prior period. As a result, constant currency results neutralize the
effects of foreign currency.
Safe Harbor for Forward-Looking
Statements
This press release contains "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. All statements, other than statements of
historical fact, including: the Company’s business outlook,
the Company’s forecasted GAAP and adjusted results for fiscal 2019
and its long-term growth outlook for fiscal 2020 and beyond; the
Company’s objectives for its multi-year business transformation
plan; other plans; objectives; forecasts; goals; beliefs; business
strategies; future events; business conditions; results of
operations; financial position and business outlook and trends; and
other information, may be forward-looking statements. Words such as
"might," "will," "may," "could," "should," "estimates," "expects,"
"continues," "contemplates," "anticipates," "projects," "plans,"
"potential," "predicts," "intends," "believes," "forecasts,"
"future," "assumes," and variations of such words or similar
expressions are intended to identify 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, or
implied by, these forward-looking statements.
Factors that could cause actual results to
differ materially from those contemplated by the forward-looking
statements include: the Company’s success in obtaining, retaining
and selling additional services to customers; the pricing of
products and services; overall market and economic conditions,
including interest rate and foreign currency trends, and technology
trends; adverse global economic conditions and credit markets and
volatility in the countries in which we do business; auto sales and
advertising and related industry changes; competitive conditions;
changes in regulation (including future interpretations,
assumptions and regulatory guidance related to the Tax Cuts and
Jobs Act); changes in technology, security breaches, interruptions,
failures and other errors involving the Company’s systems;
availability of skilled technical employees/labor/personnel; the
impact of new acquisitions and divestitures; employment and wage
levels; availability of capital for the payment of debt service
obligations or dividends or the repurchase of shares; any changes
to the Company’s credit ratings and the impact of such changes on
financing costs, rates, terms, debt service obligations, access to
capital market and working capital needs; the impact of the
Company’s indebtedness, access to cash and financing, and ability
to secure financing, or financing at attractive rates; litigation
involving contract, intellectual property, competition,
shareholder, and other matters, and governmental investigations;
the Company’s ability to timely and effectively implement its
transformation plan; and the ability of the Company’s significant
stockholders and their affiliates to significantly influence the
Company’s decisions or cause it to incur significant costs.
There may be other factors that may cause the
Company’s actual results, performance or achievements to differ
materially from those expressed in, or implied by, the
forward-looking statements. The Company gives no assurances
that any of the events anticipated by the forward-looking
statements will occur or, if any of them do, what impact they will
have on its results of operations and financial condition. You
should carefully read the factors described in the Company’s
reports filed with the Securities and Exchange
Commission ("SEC"), including those discussed under "Part I,
Item 1A. Risk Factors" in its most recent Annual Report on Form
10-K and its most recent Quarterly Report on Form 10-Q for a
description of certain risks that could, among other things, cause
the Company’s actual results to differ from any
forward-looking statements contained herein. These filings can be
found on the Company’s website at www.cdkglobal.com and
the SEC's website at www.sec.gov.
All forward-looking statements speak only as of
the date of this press release even if subsequently made available
by the Company on its website or otherwise. The Company disclaims
any obligation to update or revise any forward-looking statements
that may be made to reflect new information or future events or
circumstances that arise after the date made or to reflect the
occurrence of unanticipated events, other than as required by
law.
Investor Relations Contact: |
Media
Contact: |
Katie
Coleman847.485.4650katherine.coleman@cdk.com |
David
Webster, Aberdeen
Strategies469.222.3667david.webster@aberdeenstrategies.com |
|
|
Source: CDK Global, Inc.
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