LAKE SUCCESS, N.Y.,
Aug. 7, 2018 /PRNewswire/ -- Broadridge Financial Solutions,
Inc. (NYSE: BR) today reported financial results for the fourth
quarter of its fiscal year 2018. Results for the three and twelve
months ended June 30, 2018 compared
with the same period last year were as follows:
Summary Financial
Results
|
|
Fourth
Quarter
|
|
|
Fiscal
Year
|
|
Dollars in
millions, except per share data
|
|
2018
|
2017
|
Change
|
|
2018
|
2017
|
Change
|
|
|
|
|
|
|
|
|
|
|
Total
revenues
|
|
$1,320
|
$1,346
|
(2)%
|
|
$4,330
|
$4,143
|
5%
|
Recurring fee
revenues
|
|
862
|
806
|
7%
|
|
2,610
|
2,451
|
6%
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
265
|
297
|
(11)%
|
|
595
|
532
|
12%
|
Operating income
margin
|
|
20.1%
|
22.1%
|
|
|
13.7%
|
12.8%
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Operating
income - Non-GAAP
|
|
290
|
324
|
(10)%
|
|
685
|
623
|
10%
|
Adjusted Operating
income margin - Non-GAAP
|
|
22.0%
|
24.1%
|
|
|
15.8%
|
15.0%
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
EPS
|
|
$1.72
|
$1.57
|
10%
|
|
$3.56
|
$2.70
|
32%
|
Adjusted EPS -
Non-GAAP
|
|
$1.86
|
$1.71
|
9%
|
|
$4.19
|
$3.13
|
34%
|
|
|
|
|
|
|
|
|
|
|
Closed
sales
|
|
$115
|
$64
|
81%
|
|
$215
|
$188
|
14%
|
"Broadridge had a strong fourth quarter to cap off a very strong
fiscal 2018. I am especially pleased by our success in Closed
sales, as we delivered a record sales quarter and fiscal year,"
said Rich Daly, Broadridge's Chief
Executive Officer. "Broadridge also achieved 10% Adjusted Operating
income growth for the full year while making investments in new
products and technologies including artificial intelligence,
blockchain, cloud, and digital. Adjusted EPS grew 34% in fiscal
2018, aided by our strong performance and lower tax rate."
"We expect fiscal 2019 to be another strong year as we build off
the momentum of 2018. Our guidance calls for recurring fee revenue
growth in the range of 5% to 7% and Adjusted EPS growth of 9% to
13%. With a robust pipeline, we expect Closed sales in the range of
$185 million to $225 million. The combination of our strong
fiscal 2018 and our outlook for 2019 has put Broadridge on track to
achieve the three-year objectives laid out at our Investor Day last
December."
"I am more confident than ever that Broadridge is well
positioned to deliver future growth," Mr. Daly concluded.
Fiscal Year 2019 Financial Guidance
The Company anticipates:
|
|
|
|
|
|
|
|
|
|
Recurring fee revenue
growth
|
|
|
|
|
|
|
|
|
5-7%
|
Total revenue
growth
|
|
|
|
|
|
|
|
|
3-5%
|
|
|
|
|
|
|
|
|
|
|
Operating income
margin - GAAP
|
|
|
|
|
|
|
|
|
~14.5%
|
Adjusted Operating
income margin - Non-GAAP
|
|
|
|
|
|
|
|
|
~16.5%
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share growth
|
|
|
|
|
|
|
|
|
12-16%
|
Adjusted Earnings per
share growth - Non-GAAP
|
|
|
|
|
|
|
|
|
9-13%
|
|
|
|
|
|
|
|
|
|
|
Free cash flow -
Non-GAAP
|
|
|
|
|
|
|
|
|
$565-615M
|
Closed
sales
|
|
|
|
|
|
|
|
|
$185-225M
|
|
Note: Fiscal year
2019 guidance includes $25 million of excess tax benefits related
to stock-based compensation, down from $41 million
in fiscal year 2018.
|
|
Financial Results for the Fourth Quarter of Fiscal Year
2018
Revenues
Revenues for the three months ended
June 30, 2018 ("fourth quarter of
fiscal year 2018") decreased 2% to $1,320
million from $1,346 million in
the prior year period.
Recurring fee revenues rose 7% to $862
million from $806 million. The
increase in recurring fee revenues reflected organic growth of 6%
(including 3pts from internal growth and 3pts from Net New
Business) and 1pt from our recent acquisitions. Event-driven fee
revenues decreased 33% to $61
million, primarily from decreased mutual fund proxy and
equity proxy contests.
Distribution revenues decreased $53
million, or 11%, to $423
million. Changes in foreign currency rates positively
impacted revenues by $2 million as
compared to the prior year period.
Operating Income
For the fourth quarter of fiscal year
2018:
- Operating income was $265
million, a decrease of $32
million, or 11%, compared to $297
million for the prior year period. Operating income margin
decreased to 20.1%, compared to 22.1% for the prior year
period.
- Adjusted Operating income was $290
million, a decrease of $34
million, or 10%, compared to $324
million for the prior year period. Adjusted Operating income
margin decreased to 22.0%, compared to 24.1% for the prior year
period.
- The decreases in Operating income margin and Adjusted Operating
income margin are primarily due to the decrease in event-driven fee
revenues and an increase in other operating expenses, including
growth initiatives.
Interest Expense and Other Non-Operating
Income
Interest expense, net for the fourth quarter of
fiscal year 2018 was $10 million, a
decrease of $1 million, or 8%,
compared to $11 million for the prior
year period. The decrease was primarily due to a $1 million increase in interest income.
Other non-operating income, net was $3
million, an increase of $4
million, compared to $2
million of Other non-operating expense, net for the prior
year period. The increase was primarily due to decreased foreign
currency transaction losses.
Effective Tax Rate
The effective tax rate for the
fourth quarter of fiscal year 2018 was 19.8% compared to 34.3% for
the prior year period. The decrease in the effective tax rate is
primarily due to the recognition of $22
million of excess tax benefits attributable to stock-based
compensation as well as the corporate tax rate change under the Tax
Cuts and Jobs Act (the "Tax Act").
Net Earnings and Earnings per Share
For the fourth
quarter of fiscal year 2018:
- Net earnings increased 11% to $207
million, compared to $187
million for the prior year period.
- Adjusted Net earnings increased 9% to $224 million, compared to $204 million for the prior year period.
- Diluted earnings per share increased 10% to $1.72, compared to $1.57 for the prior year period.
- Adjusted earnings per share increased 9% to $1.86 compared to $1.71 for the prior year period.
Segment and Other Results for the Fourth Quarter of Fiscal
Year 2018
Investor Communication Solutions ("ICS")
ICS revenues for the fourth quarter of fiscal year 2018 were
$1,112 million, a decrease of
$44 million, or 4%, compared to
$1,156 million for the prior year
period.
- Recurring fee revenues rose $39
million, or 7%, to $628
million. The increase was attributable to: (i) internal
growth (3pts), (ii) Net New Business from increases in revenue from
Closed sales (2pts) and (iii) revenues from acquisitions
(1pt).
- Internal growth was driven by position growth for annual equity
proxy communications and mutual fund and exchange traded fund
("ETF") interims, which rose 11% and 13%, respectively. These are
partially offset by lower volumes from other communications.
- Event-driven fee revenues decreased $30
million, or 33%, to $61
million, the result of decreased mutual fund proxy and
equity proxy contests.
- Distribution revenues decreased $53
million, or 11%, to $423
million.
ICS earnings before income taxes for the fourth quarter of
fiscal year 2018 were $284 million, a
decrease of $14 million, or 5%,
compared to $298 million for the
prior year period, primarily due to lower event-driven revenues and
an increase in other operating expenses partially offset by higher
recurring fee revenues. Pre-tax margins decreased by 0.3 percentage
points to 25.5% from 25.8%.
Global Technology and Operations ("GTO")
GTO revenues for the fourth quarter of fiscal year 2018 were
$234 million, an increase of
$17 million, or 8%, compared to
$217 million in the prior year
period. The increase was attributable to: (i) internal growth from
higher trade and non-trade activity levels (4pts) and (ii) higher
Net New Business from increases in revenue from Closed sales
(4pts).
GTO earnings before income taxes for the fourth quarter of
fiscal year 2018 were $46 million, an
increase of $7 million, or 18%,
compared to $39 million in the prior
year period, due to higher organic revenues. Pre-tax margins
increased by 1.8 percentage points to 19.8% from 18.0%.
Other
Other Pre-tax loss increased 42% in the fourth quarter of fiscal
year 2018 to $74 million from
$53 million in the prior year period.
The increased loss was primarily due to higher spending on growth
initiatives and higher performance-based compensation expense,
partially offset by decreased foreign currency transaction
losses.
Financial Results for the Fiscal Year Ended June 30, 2018
Revenues
Revenues for the fiscal year ended
June 30, 2018 increased 5% to
$4,330 million from $4,143 million in the prior year period.
Recurring fee revenues rose 6% to $2,610
million from $2,451 million.
The increase in recurring fee revenues reflected organic growth of
5% (including 3pts from Net New Business and 2pts from internal
growth) and 1pt from our recent acquisitions. Event-driven fee
revenues rose 30% to $284 million
from $219 million, primarily from
increased equity proxy contests and mutual fund proxy activity.
Distribution revenues decreased $41
million, or 3%, to $1,513
million. Changes in foreign currency rates positively
impacted revenues by $4 million as
compared to the prior year period.
Operating Income
For fiscal year 2018:
- Operating income was $595
million, an increase of $63
million, or 12%, compared to $532
million for the prior year period. Operating income margin
increased to 13.7%, compared to 12.8% for the prior year
period.
- Adjusted Operating income was $685
million, an increase of $62
million, or 10%, compared to $623
million for the prior year period. Adjusted Operating income
margin increased to 15.8%, compared to 15.0% for the prior year
period.
- The increases in Operating income margin and Adjusted Operating
income margin are primarily due to the increase in recurring fee
revenues and event-driven fee revenues.
Interest Expense and Other Non-Operating
Expenses
Interest expense, net for the fiscal year ended
June 30, 2018 was $39 million, a decrease of $4 million, or 10%, compared to $43 million for the fiscal year ended
June 30, 2017. The decrease was
primarily due to $2 million of lower
interest expense and a $2 million
increase in interest income.
Other non-operating income, net was $5
million, an increase of $5
million, compared to $1
million of Other non-operating expenses, net for the fiscal
year ended June 30, 2017. The
increase was primarily due to lower expense of $7 million related to decreased foreign currency
transaction losses and lower losses related to minority equity
investments of $2 million partially
offset by a decrease of $4 million in
investment gains.
Effective Tax Rate
The effective tax rate for the
fiscal year ended June 30, 2018 was
23.7%, compared to 33.1% for the prior year period. The decrease in
the effective tax rate is primarily due to the recognition of
$41 million of excess tax benefits
attributable to stock-based compensation as well as a reduced
federal tax rate, partially offset by $15
million of net tax charges relating to the enactment of the
Tax Act.
During fiscal year 2018, the Company incurred a net total of
$15 million ("the net tax charge")
tax expense resulting from the recent changes to U.S. tax laws.
These expenses included $31 million
in charges relating to earnings of certain foreign subsidiaries and
earnings deemed repatriated for U.S. tax purposes. The charges were
offset by a $15 million benefit from
the remeasurement of the Company's net U.S. federal and state
deferred tax liabilities.
Excluding the $41 million of
excess tax benefits and the net tax charge of $15 million, the provision for income taxes would
have been $159 million for the fiscal
year ended June 30, 2018, and the
effective tax rate would have been 28.3%.
Net Earnings and Earnings per Share
For the fiscal
year ended June 30, 2018:
- Net earnings increased 31% to $428
million, compared to $327
million for the prior year period.
- Adjusted Net earnings increased 33% to $504 million, compared to $378 million for the prior year period.
- Diluted earnings per share increased 32% to $3.56, compared to $2.70 for the prior year period.
- Adjusted earnings per share increased 34% to $4.19 compared to $3.13 for the prior year period.
Segment and Other Results for Fiscal Year Ended June 30, 2018
Investor Communication Solutions
ICS revenues for the fiscal year ended June
30, 2018 were $3,496 million,
an increase of $97 million, or 3%,
compared to $3,399 million for the
prior year period.
- Recurring fee revenues rose $73
million, or 5%, to $1,699
million compared to $1,626
million in the prior year period. The increase was
attributable to: (i) Net New Business from increases in revenues
from Closed sales (2pts), internal growth (2pt) and (ii) revenues
from acquisitions (1pt).
- Internal growth was driven by position growth for annual equity
proxy communications and mutual fund and ETF interims, which rose
11% and 10%, respectively, partially offset by lower volumes of
other communications.
- Event-driven fee revenues increased $65
million, or 30%, to $284
million, the result of increased equity proxy contests and
mutual fund proxy activity.
- Distribution revenues decreased $41
million, or 3%, to $1,513
million.
ICS earnings before income taxes for the fiscal year ended
June 30, 2018 were $495 million, an increase of $66 million, or 16%, compared to $428 million for the prior year period, primarily
due to higher recurring fee revenues and event-driven fee revenues.
Pre-tax margins increased by 1.5 percentage points to 14.1% from
12.6%.
Global Technology and Operations
GTO revenues for the fiscal year ended June
30, 2018 were $912 million, an
increase of $86 million, or 10%,
compared to $825 million in the prior
year period. The increase was attributable to: (i) higher Net New
Business from Closed sales (5pts), (ii) internal growth from higher
trade and non-trade activity levels (4pts) and (iii) revenue from
recent acquisitions (2pts).
GTO earnings before income taxes were $199 million, an increase of $37 million, or 23%, compared to $162 million in the prior year period, primarily
due to higher organic revenues. Pre-tax margins increased by 2.2
percentage points to 21.9% from 19.7%.
Other
Other Pre-tax loss increased 37% in the fiscal year ended
June 30, 2018 to $151 million from $111
million in the prior year period. The increased loss was
primarily due to higher spending on growth initiatives and higher
performance-based compensation expense, partially offset by
decreased foreign currency transaction losses.
Changes in U.S. Federal Tax Laws
The Tax Act was
enacted into law on December 22,
2017. One of the primary provisions of this new legislation
is a reduction of the U.S. federal corporate statutory rate to 21%
from 35%. With a fiscal year ending June 30,
2018, Broadridge's full year corporate rate was subject to a
blended rate that included both the new and old rates. Beginning in
fiscal year 2019, the Company will realize the full benefit of the
lower corporate statutory rate in its provision for income
taxes.
In addition, as a result of the changes in tax laws, Broadridge
incurred a net tax charge of $15
million tax expense related to the repatriation of earnings
from certain foreign subsidiaries and the tax remeasurement of the
Company's net U.S. federal and state deferred tax liabilities. This
amount is provisional and represents the Company's best estimate of
the expected impact from the tax law changes. The ultimate impact
of these changes may differ from Broadridge's estimate due to
changes in interpretations and assumptions made by the Company,
additional regulatory guidance that may be issued, as well as the
amount of our fiscal year 2018 earnings before taxes.
Fourth Quarter 2018 Acquisitions
In May 2018, the Company acquired FundAssist
Limited, a regulatory, marketing and sales solutions service
provider to the global investments industry, for an aggregate
purchase price of $47 million. In
June 2018, the Company acquired
MackayWilliams LLP, a specialist European fund market and research
firm, for an aggregate purchase price of $8
million.
Other Events
Dividend Declaration and Increase
On August 6, 2018, Broadridge's Board
of Directors declared a quarterly dividend of $0.485 per share payable on October 3, 2018 to shareholders of record on
September 18, 2018. This
declaration reflects the Board's approval of an increase in the
annual dividend amount by 33% from $1.46 to $1.94,
subject to the discretion of the Board to declare quarterly
dividends. With this increase, the company's annual divided
has increased for the eleventh consecutive year since becoming a
public company in 2007.
Earnings Conference Call
An analyst conference call
will be held today, Tuesday, August 7, 2018 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
live event and access the slide presentation, visit Broadridge's
Investor Relations website at www.broadridge-ir.com prior to
the start of the webcast. To listen to the call, investors may also
dial 1-844-348-2805 within the United
States and international callers may dial
1-213-785-7185.
A replay of the webcast will be available and can be accessed in
the same manner as the live webcast at the Broadridge Investor
Relations site. Through August 21,
2018, the recording will also be available by dialing
1-855-859-2056 passcode: 3275599 within the United States or 1-404-537-3406 passcode:
3275599 for international callers.
Explanation and Reconciliation of the Company's Use of
Non-GAAP Financial Measures
The Company's results in this
press release are presented in accordance with U.S. generally
accepted accounting principles ("GAAP") except where otherwise
noted. In certain circumstances, results have been presented that
are not generally accepted accounting principles measures
("Non-GAAP"). These Non-GAAP measures are Adjusted Operating
income, Adjusted Operating income margin, Adjusted Net earnings,
Adjusted earnings per share, and Free cash flow. These Non-GAAP
financial measures should be viewed in addition to, and not as a
substitute for, the Company's reported results.
The Company believes our Non-GAAP financial measures help
investors understand how management plans, measures and evaluates
the Company's business performance. Management believes that
Non-GAAP measures provide consistency in its financial reporting
and facilitates investors' understanding of the Company's operating
results and trends by providing an additional basis for comparison.
Management uses these Non-GAAP financial measures to, among other
things, evaluate our ongoing operations, for internal planning and
forecasting purposes and in the calculation of performance-based
compensation. In addition, and as a consequence of the importance
of these Non-GAAP financial measures in managing our business, the
Company's Compensation Committee of the Board of Directors
incorporates Non-GAAP financial measures in the evaluation process
for determining management compensation.
Adjusted Operating Income, Adjusted Operating Income Margin,
Adjusted Net Earnings and Adjusted Earnings per Share
These
Non-GAAP measures reflect Operating income, Operating income
margin, Net earnings, and Diluted earnings per share, as adjusted
to exclude the impact of certain costs, expenses, gains and losses
and other specified items that management believes are not
indicative of our ongoing operating performance. These adjusted
measures exclude the impact of: (i) Amortization of Acquired
Intangibles and Purchased Intellectual Property, (ii) Acquisition
and Integration Costs, (iii) Tax Act items, (iv) the Gain on Sale
of Securities and (v) the Message Automation Limited ("MAL")
investment gain. Amortization of Acquired Intangibles and Purchased
Intellectual Property represents non-cash amortization expenses
associated with the Company's acquisition activities. Acquisition
and Integration Costs represent certain transaction and integration
costs associated with the Company's acquisition activities. Tax Act
items represent the net impact of a U.S. federal transition tax on
earnings of certain foreign subsidiaries, foreign jurisdiction
withholding taxes and certain benefits related to the remeasurement
of the Company's net U.S. federal and state deferred tax
liabilities attributable to the Tax Act. The Gain on Sale of
Securities represents a non-operating gain on the sale of
securities associated with the Company's retirement plan
obligations. The MAL investment gain represents a non-cash,
nontaxable gain on investment from the Company's acquisition of MAL
in March 2017.
We exclude Amortization of Acquired Intangibles and Purchased
Intellectual Property, Acquisition and Integration Costs, Tax Act
items, Gain on Sale of Securities and the MAL investment gain from
our earnings measures because excluding such information provides
us with an understanding of the results from the primary operations
of our business and these items do not reflect ordinary operations
or earnings. Management believes these adjusted measures may be
useful to an investor in evaluating the underlying operating
performance of our business.
Free Cash Flow
In addition to the Non-GAAP financial
measures discussed above, we provide Free cash flow information
because we consider Free cash flow to be a liquidity measure that
provides useful information to management and investors about the
amount of cash generated that could be used for dividends, share
repurchases, strategic acquisitions, other investments, as well as
debt servicing. Free cash flow is a Non-GAAP financial measure and
is defined by the Company as Net cash flows provided by operating
activities less Capital expenditures as well as Software purchases
and capitalized internal use software.
Reconciliations of such Non-GAAP measures to the most directly
comparable financial measures presented in accordance with GAAP can
be found in the tables that are part of this press release.
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,
and which may be identified by the use of words such as "expects,"
"assumes," "projects," "anticipates," "estimates," "we believe,"
"could be" and other words of similar meaning, are forward-looking
statements. In particular, information appearing in the "Fiscal
Year 2019 Financial Guidance" section 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, 2018 (the "2018 Annual
Report"), as they may be updated in any future reports filed with
the Securities and Exchange Commission. All forward-looking
statements speak only as of the date of this press release and are
expressly qualified in their entirety by reference to the factors
discussed in the 2018 Annual Report.
These risks include: the success of Broadridge in retaining and
selling additional services to its existing clients and in
obtaining new clients; Broadridge's reliance on a relatively small
number of clients, the continued financial health of those clients,
and the continued use by such clients of Broadridge's services with
favorable pricing terms; a material security breach or
cybersecurity attack affecting the information of Broadridge's
clients; changes in laws and regulations affecting Broadridge's
clients or the services provided by Broadridge; declines in
participation and activity in the securities markets; the failure
of Broadridge's key service providers to provide the anticipated
levels of service; a disaster or other significant slowdown or
failure of Broadridge's systems or error in the performance of
Broadridge's services; overall market and economic conditions and
their impact on the securities markets; Broadridge's failure to
keep pace with changes in technology and demands of its clients;
Broadridge's ability to attract and retain key personnel; the
impact of new acquisitions and divestitures; and competitive
conditions. Broadridge disclaims any obligation to update or revise
forward-looking statements that may be made to reflect events or
circumstances that arise after the date made or to reflect the
occurrence of unanticipated events, other than as required by
law.
About Broadridge
Broadridge Financial Solutions, Inc.
(NYSE:BR) a global fintech leader and a member of the S&P 500,
is the leading provider of investor communications and
technology-driven solutions to banks, broker-dealers, asset
managers and corporate issuers globally. Broadridge's investor
communications, securities processing and managed services
solutions help clients reduce their capital investments in
operations infrastructure, allowing them to increase their focus on
core business activities. With over 50 years of experience,
Broadridge's infrastructure underpins proxy voting services for
over 50 percent of public companies and mutual funds globally, and
processes on average more than $5
trillion in fixed income and equity trades per day.
Broadridge employs over 10,000 full time associates in 18
countries. For more information about Broadridge, please visit
www.broadridge.com.
Contact Information
Investors:
W. Edings
Thibault
Investor Relations
(516) 472-5129
Media:
Gregg
Rosenberg
Corporate Communications
(212) 918-6966
Broadridge
Financial Solutions, Inc.
|
Condensed
Consolidated Statements of Earnings
|
(Unaudited)
|
|
Dollars in
millions, except per share amounts
|
|
|
Three Months
Ended June 30,
|
|
Fiscal Year
Ended June 30,
|
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Revenues
|
|
|
$
|
1,320.4
|
|
|
$
|
1,345.7
|
|
|
$
|
4,329.9
|
|
|
$
|
4,142.6
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
|
|
870.1
|
|
|
910.1
|
|
|
3,169.6
|
|
|
3,109.6
|
|
Selling, general and
administrative expenses
|
|
|
184.9
|
|
|
138.6
|
|
|
565.4
|
|
|
501.4
|
|
Total operating
expenses
|
|
|
1,055.0
|
|
|
1,048.7
|
|
|
3,735.0
|
|
|
3,611.0
|
|
Operating
income
|
|
|
265.4
|
|
|
297.0
|
|
|
594.9
|
|
|
531.6
|
|
Interest expense,
net
|
|
|
10.0
|
|
|
10.9
|
|
|
38.6
|
|
|
42.7
|
|
Other non-operating
(income) expense, net
|
|
|
(2.6)
|
|
|
1.5
|
|
|
(4.7)
|
|
|
0.8
|
|
Earnings before
income taxes
|
|
|
258.0
|
|
|
284.7
|
|
|
561.0
|
|
|
488.1
|
|
Provision for income
taxes
|
|
|
51.2
|
|
|
97.6
|
|
|
133.1
|
|
|
161.4
|
|
Net
earnings
|
|
|
$
|
206.9
|
|
|
$
|
187.1
|
|
|
$
|
427.9
|
|
|
$
|
326.8
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share
|
|
|
$
|
1.76
|
|
|
$
|
1.60
|
|
|
$
|
3.66
|
|
|
$
|
2.77
|
|
Diluted earnings per
share
|
|
|
$
|
1.72
|
|
|
$
|
1.57
|
|
|
$
|
3.56
|
|
|
$
|
2.70
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
117.2
|
|
|
117.1
|
|
|
116.8
|
|
|
118.0
|
|
Diluted
|
|
|
120.4
|
|
|
119.5
|
|
|
120.4
|
|
|
120.8
|
|
Dividends declared
per common share
|
|
|
$
|
0.365
|
|
|
$
|
0.33
|
|
|
$
|
1.46
|
|
|
$
|
1.32
|
|
|
Amounts may not
sum due to rounding.
|
Broadridge
Financial Solutions, Inc.
|
Condensed
Consolidated Balance Sheets
|
(Unaudited)
|
|
Dollars in
millions, except per share amounts
|
|
|
June
30, 2018
|
|
June
30, 2017
|
Assets
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
$
|
263.9
|
|
|
$
|
271.1
|
|
Accounts receivable,
net of allowance for doubtful accounts of $2.7 and
$3.7, respectively
|
|
|
615.0
|
|
|
589.5
|
|
Other current
assets
|
|
|
112.2
|
|
|
129.0
|
|
Total current
assets
|
|
|
991.1
|
|
|
989.6
|
|
Property, plant and
equipment, net
|
|
|
204.1
|
|
|
198.1
|
|
Goodwill
|
|
|
1,254.9
|
|
|
1,159.3
|
|
Intangible assets,
net
|
|
|
494.1
|
|
|
486.4
|
|
Other non-current
assets
|
|
|
360.5
|
|
|
316.4
|
|
Total
assets
|
|
|
$
|
3,304.7
|
|
|
$
|
3,149.8
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts
payable
|
|
|
191.8
|
|
|
167.2
|
|
Accrued expenses and
other current liabilities
|
|
|
479.2
|
|
|
495.3
|
|
Deferred
revenues
|
|
|
106.3
|
|
|
82.4
|
|
Total current
liabilities
|
|
|
777.3
|
|
|
744.9
|
|
Long-term
debt
|
|
|
1,053.4
|
|
|
1,102.1
|
|
Deferred
taxes
|
|
|
57.9
|
|
|
82.0
|
|
Deferred
revenues
|
|
|
75.2
|
|
|
74.3
|
|
Other non-current
liabilities
|
|
|
246.5
|
|
|
142.7
|
|
Total
liabilities
|
|
|
2,210.4
|
|
|
2,146.0
|
|
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, 154.5
and 154.5 shares, respectively;
outstanding, 116.3 and 116.5 shares,
respectively
|
|
|
1.6
|
|
|
1.6
|
|
Additional paid-in
capital
|
|
|
1,048.5
|
|
|
987.6
|
|
Retained
earnings
|
|
|
1,727.0
|
|
|
1,469.4
|
|
Treasury stock, at
cost: 38.1 and 38.0 shares, respectively
|
|
|
(1,630.8)
|
|
|
(1,398.9)
|
|
Accumulated other
comprehensive loss
|
|
|
(51.9)
|
|
|
(55.8)
|
|
Total stockholders'
equity
|
|
|
1,094.3
|
|
|
1,003.8
|
|
Total liabilities and
stockholders' equity
|
|
|
$
|
3,304.7
|
|
|
$
|
3,149.8
|
|
|
Amounts may not
sum due to rounding.
|
Broadridge
Financial Solutions, Inc.
|
Condensed
Consolidated Statements of Cash Flows
|
|
Dollars in
millions, unaudited
|
Fiscal Year
Ended June 30,
|
|
2018
|
|
2017
|
Cash Flows From
Operating Activities
|
|
|
|
Net
earnings
|
$
|
427.9
|
|
|
$
|
326.8
|
|
Adjustments to
reconcile Net earnings to Net cash flows provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
82.1
|
|
|
68.6
|
|
Amortization of
acquired intangibles and purchased intellectual property
|
81.4
|
|
|
72.6
|
|
Amortization of other
assets
|
48.5
|
|
|
41.0
|
|
Stock-based
compensation expense
|
55.1
|
|
|
46.1
|
|
Deferred income
taxes
|
(9.3)
|
|
|
(14.7)
|
|
Excess tax benefits
from stock-based compensation awards
|
—
|
|
|
(40.6)
|
|
Other
|
(21.2)
|
|
|
(8.6)
|
|
Changes in operating
assets and liabilities, net of assets and liabilities
acquired:
|
|
|
|
Current assets and
liabilities:
|
|
|
|
Increase in Accounts
receivable, net
|
(18.6)
|
|
|
(44.4)
|
|
(Increase) decrease
in Other current assets
|
(7.6)
|
|
|
5.6
|
|
Increase in Accounts
payable
|
43.0
|
|
|
16.2
|
|
Increase (decrease)
in Accrued expenses and other current liabilities
|
(33.4)
|
|
|
119.2
|
|
Increase (decrease)
in Deferred revenues
|
20.8
|
|
|
(4.5)
|
|
Non-current assets
and liabilities:
|
|
|
|
Increase in Other
non-current assets
|
(83.5)
|
|
|
(90.7)
|
|
Increase in Other
non-current liabilities
|
108.3
|
|
|
23.2
|
|
Net cash flows
provided by operating activities
|
693.6
|
|
|
515.9
|
|
Cash Flows From
Investing Activities
|
|
|
|
Capital
expenditures
|
(76.7)
|
|
|
(85.4)
|
|
Software purchases
and capitalized internal use software
|
(21.2)
|
|
|
(28.3)
|
|
Acquisitions, net of
cash acquired
|
(108.3)
|
|
|
(448.7)
|
|
Purchase of
intellectual property
|
(40.0)
|
|
|
(90.0)
|
|
Other investing
activities
|
(3.1)
|
|
|
(6.9)
|
|
Net cash flows used
in investing activities
|
(249.3)
|
|
|
(659.3)
|
|
Cash Flows From
Financing Activities
|
|
|
|
Debt
proceeds
|
340.0
|
|
|
500.0
|
|
Debt
repayments
|
(390.0)
|
|
|
(415.0)
|
|
Excess tax benefits
from stock-based compensation awards
|
—
|
|
|
40.6
|
|
Dividends
paid
|
(165.8)
|
|
|
(152.2)
|
|
Purchases of Treasury
stock
|
(277.1)
|
|
|
(342.8)
|
|
Proceeds from
exercise of stock options
|
52.0
|
|
|
60.9
|
|
Other financing
activities
|
(9.0)
|
|
|
(3.2)
|
|
Net cash flows used
in financing activities
|
(449.9)
|
|
|
(311.7)
|
|
Effect of exchange
rate changes on Cash and cash equivalents
|
(1.6)
|
|
|
(1.6)
|
|
Net change in Cash
and cash equivalents
|
(7.2)
|
|
|
(456.7)
|
|
Cash and cash
equivalents, beginning of period
|
271.1
|
|
|
727.7
|
|
Cash and cash
equivalents, end of period
|
$
|
263.9
|
|
|
$
|
271.1
|
|
|
Amounts may not
sum due to rounding.
|
Broadridge
Financial Solutions, Inc.
|
Segment
Results
|
(Unaudited)
|
|
Dollars in
millions
|
Revenues
|
|
Three Months
Ended June 30,
|
|
Fiscal Year
Ended June 30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
(in
millions)
|
Investor
Communication Solutions
|
$
|
1,111.7
|
|
|
$
|
1,155.7
|
|
|
$
|
3,495.6
|
|
|
$
|
3,398.6
|
|
Global Technology and
Operations
|
233.5
|
|
|
216.7
|
|
|
911.6
|
|
|
825.5
|
|
Foreign currency
exchange
|
(24.8)
|
|
|
(26.7)
|
|
|
(77.3)
|
|
|
(81.5)
|
|
Total
|
$
|
1,320.4
|
|
|
$
|
1,345.7
|
|
|
$
|
4,329.9
|
|
|
$
|
4,142.6
|
|
|
|
|
|
|
Earnings (Loss)
before Income
Taxes
|
|
Three Months
Ended June 30,
|
|
Fiscal Year
Ended June 30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
(in
millions)
|
Investor
Communication Solutions
|
$
|
283.6
|
|
|
$
|
297.6
|
|
|
$
|
494.6
|
|
|
$
|
428.2
|
|
Global Technology and
Operations
|
46.3
|
|
|
39.1
|
|
|
199.3
|
|
|
162.5
|
|
Other
|
(74.5)
|
|
|
(52.6)
|
|
|
(151.4)
|
|
|
(110.5)
|
|
Foreign currency
exchange
|
2.5
|
|
|
0.5
|
|
|
18.6
|
|
|
8.1
|
|
Total
|
$
|
258.0
|
|
|
$
|
284.7
|
|
|
$
|
561.0
|
|
|
$
|
488.1
|
|
|
|
|
|
|
|
|
|
Pre-tax
margins:
|
Investor
Communication Solutions
|
25.5
|
%
|
|
25.8
|
%
|
|
14.1
|
%
|
|
12.6
|
%
|
Global Technology and
Operations
|
19.8
|
%
|
|
18.0
|
%
|
|
21.9
|
%
|
|
19.7
|
%
|
|
|
|
Amounts may not
sum due to rounding.
|
Broadridge
Financial Solutions, Inc.
|
Reconciliation of
Non-GAAP to GAAP Measures
|
(Unaudited)
|
|
Dollars in
millions, except per share amounts
|
Three Months
Ended June 30,
|
|
Fiscal Year
Ended June 30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
(in
millions)
|
Operating income
(GAAP)
|
$
|
265.4
|
|
|
$
|
297.0
|
|
|
$
|
594.9
|
|
|
$
|
531.6
|
|
Adjustments:
|
|
|
|
|
|
|
|
Amortization of
Acquired Intangibles and Purchased
Intellectual Property
|
22.1
|
|
|
19.7
|
|
|
81.4
|
|
|
72.6
|
|
Acquisition and
Integration Costs
|
2.8
|
|
|
7.1
|
|
|
8.8
|
|
|
19.1
|
|
Adjusted Operating
income (Non-GAAP)
|
$
|
290.2
|
|
|
$
|
323.9
|
|
|
$
|
685.1
|
|
|
$
|
623.3
|
|
Operating income
margin (GAAP)
|
20.1
|
%
|
|
22.1
|
%
|
|
13.7
|
%
|
|
12.8
|
%
|
Adjusted Operating
income margin (Non-GAAP)
|
22.0
|
%
|
|
24.1
|
%
|
|
15.8
|
%
|
|
15.0
|
%
|
|
|
|
|
|
|
|
|
|
Three Months
Ended June 30,
|
|
Fiscal Year
Ended June 30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
(in
millions)
|
Net earnings
(GAAP)
|
$
|
206.9
|
|
|
$
|
187.1
|
|
|
$
|
427.9
|
|
|
$
|
326.8
|
|
Adjustments:
|
|
|
|
|
|
|
|
Amortization of
Acquired Intangibles and Purchased
Intellectual Property
|
22.1
|
|
|
19.7
|
|
|
81.4
|
|
|
72.6
|
|
Acquisition and
Integration Costs
|
2.8
|
|
|
7.1
|
|
|
8.8
|
|
|
19.1
|
|
Gain on Sale of
Securities
|
—
|
|
|
—
|
|
|
(5.5)
|
|
|
—
|
|
Taxable
adjustments
|
24.8
|
|
|
26.9
|
|
|
84.7
|
|
|
91.7
|
|
Tax Act
items
|
(0.7)
|
|
|
—
|
|
|
15.4
|
|
|
—
|
|
MAL investment
gain
|
—
|
|
|
—
|
|
|
—
|
|
|
(9.3)
|
|
Tax impact of
adjustments (a)
|
(7.3)
|
|
|
(9.6)
|
|
|
(23.9)
|
|
|
(30.9)
|
|
Adjusted Net earnings
(Non-GAAP)
|
$
|
223.7
|
|
|
$
|
204.3
|
|
|
$
|
504.1
|
|
|
$
|
378.3
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended June 30,
|
|
Fiscal Year
Ended June 30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Diluted earnings per
share (GAAP)
|
$
|
1.72
|
|
|
$
|
1.57
|
|
|
$
|
3.56
|
|
|
$
|
2.70
|
|
Adjustments:
|
|
|
|
|
|
|
|
Amortization of
Acquired Intangibles and Purchased
Intellectual Property
|
0.18
|
|
|
0.17
|
|
|
0.68
|
|
|
0.60
|
|
Acquisition and
Integration Costs
|
0.02
|
|
|
0.06
|
|
|
0.07
|
|
|
0.16
|
|
Gain on Sale of
Securities
|
—
|
|
|
—
|
|
|
(0.05)
|
|
|
—
|
|
Taxable
adjustments
|
0.21
|
|
|
0.22
|
|
|
0.70
|
|
|
0.76
|
|
Tax Act
items
|
(0.01)
|
|
|
—
|
|
|
0.13
|
|
|
—
|
|
MAL investment
gain
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.08)
|
|
Tax impact of
adjustments (a)
|
(0.06)
|
|
|
(0.08)
|
|
|
(0.20)
|
|
|
(0.26)
|
|
Adjusted earnings per
share (Non-GAAP)
|
$
|
1.86
|
|
|
$
|
1.71
|
|
|
$
|
4.19
|
|
|
$
|
3.13
|
|
|
(a) Calculated using
the GAAP effective tax rate, adjusted to exclude the net $0.7
million benefits and $15.4 million charges associated with the Tax
Act, as well as $22.3 million and $40.9 million of excess tax
benefits associated with stock-based compensation for the three
months and fiscal year ended June 30, 2018, respectively. For
purposes of calculating Adjusted earnings per share, the same
adjustments were made on a per share basis.
|
|
|
Fiscal Year
Ended June 30,
|
|
2018
|
|
2017
|
|
(in
millions)
|
Net cash flows
provided by operating activities (GAAP)
|
$
|
693.6
|
|
|
$
|
515.9
|
|
Capital expenditures
and Software purchases and capitalized internal use
software
|
(97.9)
|
|
|
(113.7)
|
|
Free cash flow
(Non-GAAP)
|
$
|
595.7
|
|
|
$
|
402.2
|
|
|
Amounts may not
sum due to rounding.
|
Broadridge
Financial Solutions, Inc.
|
Reconciliation of
Non-GAAP to GAAP Measures
|
Adjusted Earnings
Per Share Growth, Adjusted Operating Income Margin and Free Cash
Flow
|
Fiscal Year 2019
Guidance
|
(In millions,
except per share amounts)
|
(Unaudited)
|
|
|
|
|
Adjusted Earnings
Per Share Growth Rate (1)
|
|
|
Diluted earnings per
share (GAAP)
|
|
12% - 16%
growth
|
Adjusted earnings per
share (Non-GAAP)
|
|
9% - 13%
growth
|
|
|
|
Adjusted Operating
Income Margin (2)
|
|
|
Operating income
margin % (GAAP)
|
|
~14.5%
|
Adjusted Operating
income margin % (Non-GAAP)
|
|
~16.5%
|
|
|
|
Free Cash
Flow
|
|
|
Net cash
flows provided by operating activities (GAAP)
|
|
$660 -
$730
|
Capital expenditures
and Software purchases and capitalized internal use
software
|
|
(95) -
(115)
|
Free
cash flow (Non-GAAP)
|
|
$565 -
$615
|
|
|
|
(1) Adjusted
earnings per share growth (Non-GAAP) is adjusted to exclude the
projected impact of Amortization of Acquired Intangibles and
Purchased Intellectual Property, and Acquisition and Integration
Costs, and is calculated using diluted shares outstanding. Fiscal
year 2019 Non-GAAP Adjusted earnings per share guidance estimates
exclude Amortization of Acquired Intangibles and Purchased
Intellectual Property, and Acquisition and Integration Costs, net
of taxes, of approximately $0.60 per share.
|
(2) Adjusted
Operating income margin (Non-GAAP) is adjusted to exclude the
projected impact of Amortization of Acquired Intangibles and
Purchased Intellectual Property, and Acquisition and Integration
Costs. Fiscal year 2019 Non-GAAP Adjusted Operating income margin
guidance estimates exclude Amortization of Acquired Intangibles and
Purchased Intellectual Property, and Acquisition and Integration
Costs of approximately $94 million.
|
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SOURCE Broadridge Financial Solutions, Inc.