NEW YORK, Nov. 6, 2019 /PRNewswire/ -- Broadridge Financial
Solutions, Inc. (NYSE: BR) today reported financial results for the
first quarter ended September 30,
2019 of its fiscal year 2020. Results compared with the same
period last year were as follows:
Summary Financial
Results
|
|
First
Quarter
|
|
Dollars in
millions, except per share data
|
|
2020
|
2019
|
Change
|
|
|
|
|
|
|
Total
revenues
|
|
$949
|
$973
|
(2)
|
%
|
Recurring fee
revenues
|
|
623
|
576
|
8
|
%
|
|
|
|
|
|
|
Operating
income
|
|
73
|
100
|
(27)
|
%
|
|
Operating income
margin
|
|
7.7%
|
10.3%
|
|
|
|
|
|
|
|
Adjusted Operating
income - Non-GAAP
|
|
104
|
123
|
(16)
|
%
|
|
Adjusted Operating
income margin - Non-GAAP
|
|
10.9%
|
12.6%
|
|
|
|
|
|
|
|
Diluted
EPS
|
|
$0.48
|
$0.64
|
(25)
|
%
|
Adjusted EPS -
Non-GAAP
|
|
$0.68
|
$0.79
|
(14)
|
%
|
|
|
|
|
|
|
Closed
sales
|
|
$38
|
$18
|
103
|
%
|
"Broadridge reported solid first quarter results and is
well-positioned to deliver a strong fiscal year 2020," said
Tim Gokey, Broadridge's Chief
Executive Officer. "Recurring revenues rose 8% and we generated
record first quarter Closed sales. We also continued to make
targeted M&A investments in each of our core franchises,
further positioning us for long-term growth. As expected,
event-driven revenues returned to normalized levels from last
year's record first quarter.
"We are reaffirming our fiscal year 2020 guidance, including
recurring fee revenue growth of 8-10% and Adjusted EPS growth of
8-12%," Mr. Gokey added. "Broadridge is well on-track to achieve
our three-year objectives laid out at the 2017 Investor Day,
including the high end of our Adjusted EPS objectives."
Fiscal Year 2020 Financial Guidance -
Unchanged
|
|
|
Recurring fee revenue
growth
|
|
8-10%
|
Total revenue
growth
|
|
3-6%
|
|
|
|
Operating income
margin - GAAP
|
|
~15%
|
Adjusted Operating
income margin - Non-GAAP
|
|
~18%
|
|
|
|
Diluted earnings per
share growth
|
|
5-9%
|
Adjusted earnings per
share growth - Non-GAAP
|
|
8-12%
|
|
|
|
Closed
sales
|
|
$190-230M
|
|
|
|
Financial Results for the First Quarter Fiscal Year 2020
compared to the First Quarter Fiscal Year 2019
- Total revenues decreased 2% to $949 million from $973
million in the prior year period.
-
- Recurring fee revenues increased 8% to $623 million from $576
million. The increase in recurring fee revenues includes
6pts of growth from acquisitions. Organic growth was 2%.
- Event-driven fee revenues decreased $37
million, or 48%, to $40
million, mainly from lower mutual fund proxy activity.
- Distribution revenues decreased $28
million, or 8%, to $313
million, primarily from the decrease in event-driven fee
revenues.
- Operating income was $73
million, a decrease of $27
million, or 27%. Operating income margin decreased to 7.7%,
compared to 10.3% in the First Quarter 2019.
-
- Adjusted Operating income was $104
million, a decrease of $19
million, or 16%. Adjusted Operating income margin decreased
to 10.9%, compared to 12.6% for the prior year period.
- The decreases in Operating income and Adjusted Operating income
were primarily due to the decrease in event-driven fee
revenues.
- Interest expense, net was $13
million, an increase of $4
million, or 36%, primarily due to an increase in interest
expense from higher borrowings.
- The effective tax rate was 12.4% compared to 14.1% in the First
Quarter 2019. The effective tax rate was impacted by discrete tax
items, including excess tax benefits of $6
million, which declined from $7
million in the First Quarter 2019.
- Net earnings decreased 27% to $56 million and Adjusted Net earnings decreased
15% to $80 million.
-
- Diluted earnings per share decreased 25% to $0.48, compared to $0.64 in the First Quarter 2019 and Adjusted
earnings per share decreased 14% to $0.68, compared to $0.79 in the First Quarter 2019.
- The decreases in Diluted earnings per share and Adjusted
earnings per share were primarily due to the lower event-driven fee
revenues.
Segment and Other Results for the First Quarter 2020 compared
to First Quarter 2019
The results for the Company's Advisor Solutions services that
were previously reported in our Investor Communication Solutions
reportable segment are now reported within the Global Technology
and Operations reportable segment. As a result, our prior period
segment results have been revised to reflect this change in
reporting segments.
Investor Communication Solutions ("ICS")
- ICS total revenues were $703
million, a decrease of $52
million, or 7%.
-
- Recurring fee revenues increased $12
million, or 4%, to $349
million. The increase was attributable to the combination of
organic growth (2pts) and revenues from acquisitions (2pts).
- Event-driven fee revenues decreased $37
million, or 48%, to $40
million, mainly from lower mutual fund proxy activity
compared to the First Quarter 2019.
- Distribution revenues decreased $28
million, or 8%, to $313
million, primarily from the decrease in event-driven
activity.
- ICS earnings before income taxes were $23 million, a decrease of $36 million, or 61%, primarily due to lower
event-driven fee revenues more than offsetting the contribution
from higher recurring fee revenues. Pre-tax margins decreased to
3.3% from 7.8%.
Global Technology and Operations ("GTO")
- GTO recurring fee revenues were $274
million, an increase of $36
million, or 15%. The increase was attributable to the
combination of revenues from acquisitions (12pts) and organic
growth (3pts).
- GTO earnings before income taxes were $56 million, an increase of $10 million, or 21%, compared to $47 million in the prior year period. The
increased earnings were primarily due to higher revenues from
acquisitions, including software license sales, and higher organic
revenues, partially offset by the impact of expenditures to
implement and support new business. Pre-tax margins increased to
20.6% from 19.5%.
Other
- Other Loss before income tax decreased 9% to $21 million from $23
million in the First Quarter 2019. The decreased loss was
primarily due to an increase in investment gains and lower
corporate expenses, partially offset by higher interest expense
compared to the prior year period.
First Quarter 2020 Acquisitions
In September 2019, the Company acquired Financial
Database Services, a provider of compensation management,
compliance and advisor onboarding solutions for the wealth
management industry. The acquisition expands Broadridge's
capabilities and technology solutions for the wealth management
industry. Terms of the deal were not disclosed.
Second Quarter 2020 Acquisitions
Broadridge completed
three acquisitions subsequent to September
30, 2019 with an aggregate purchase price of approximately
$171 million.
- Shadow Financial Systems, Inc.: In October 2019, the Company acquired Shadow
Financial Systems, Inc., a provider of multi-asset class post-trade
solutions for the capital markets industry. The acquisition builds
upon Broadridge's post-trade processing capabilities by adding a
market-ready solution for exchanges, inter-dealer brokers and
proprietary trading firms. In addition, the acquisition adds
capabilities across exchange traded derivatives and cryptocurrency.
The purchase price was approximately $39
million subject to normal closing adjustments.
- Fi360, Inc.: In November 2019,
the Company acquired Fi360, Inc., a provider of fiduciary and Reg
BI solutions for the wealth and retirement industry, including the
accreditation and continuing education for the Accredited
Investment Fiduciary® (AIF®) Designation, the leading designation
focused on fiduciary responsibility. The acquisition will enhance
Broadridge's existing retirement solutions by providing wealth and
retirement advisors with fiduciary tools that will complement its
Matrix trust and trading platform. The acquisition will also
further strengthen Broadridge's data and analytics tools and
solutions suite that enable asset managers to grow their businesses
by providing greater transparency into the retirement market. The
purchase price was approximately $120
million subject to normal closing adjustments.
In October 2019, the Company also
acquired Appatura Inc. Appatura's technology and operational
capabilities enable asset managers and other issuers to streamline
the composition of regulatory and marketing communications,
enabling greater consistency and accuracy in content through a more
automated process, while meeting regulatory requirements. Terms of
the transaction were not disclosed.
Earnings Conference Call
An analyst conference call
will be held today, Wednesday, November 6,
2019 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 1-877-328-2502 within
the United States and
international callers may dial 1-412-317-5419.
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 November 20,
2019, the recording will also be available by dialing
1-877-344-7529 passcode: 10136507 within the United States or 1-412-317-0088 passcode:
10136507 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, and (ii)
Acquisition and Integration Costs. 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.
We exclude the impact of Amortization of Acquired Intangibles
and Purchased Intellectual Property, as these non-cash amounts are
significantly impacted by the timing and size of individual
acquisitions and do not factor into the Company's capital
allocation decisions, management compensation metrics or multi-year
objectives. Furthermore, management believes that this adjustment
enables better comparison of our results as Amortization of
Acquired Intangibles and Purchased Intellectual Property will not
recur in future periods once such intangible assets have been fully
amortized. Although we exclude Amortization of Acquired Intangibles
and Purchased Intellectual Property from our adjusted earnings
measures, our management believes that it is important for
investors to understand that these intangible assets contribute to
revenue generation. Amortization of intangible assets that relate
to past acquisitions will recur in future periods until such
intangible assets have been fully amortized. Any future
acquisitions may result in the amortization of additional
intangible assets.
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 2020 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 2019 (the "2019 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 2019
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 $4 billion global Fintech leader, is a
leading provider of investor communications and technology-driven
solutions to banks, broker-dealers, asset and wealth managers and
corporate issuers. Broadridge's infrastructure underpins proxy
voting services for over 50 percent of public companies and mutual
funds globally, and processes on average more
than U.S.$7 trillion in
fixed income and equity securities trades per day. Broadridge is
part of the S&P 500® Index and employs over
11,000 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
Condensed
Consolidated Statements of Earnings
|
(Unaudited)
|
|
In millions,
except per share amounts
|
|
|
Three Months
Ended
September 30,
|
|
|
|
2019
|
|
2018
|
Revenues
|
|
|
$
|
948.6
|
|
$
|
972.8
|
Operating
expenses:
|
|
|
|
|
|
Cost of
revenues
|
|
|
727.5
|
|
739.0
|
Selling, general and
administrative expenses
|
|
|
148.0
|
|
133.7
|
Total operating
expenses
|
|
|
875.4
|
|
872.7
|
Operating
income
|
|
|
73.1
|
|
100.1
|
Interest expense,
net
|
|
|
(13.1)
|
|
(9.6)
|
Other non-operating
income (expenses), net
|
|
|
3.8
|
|
(1.2)
|
Earnings before
income taxes
|
|
|
63.8
|
|
89.3
|
Provision for income
taxes
|
|
|
7.9
|
|
12.6
|
Net
earnings
|
|
|
$
|
55.9
|
|
$
|
76.7
|
|
|
|
|
|
|
Basic earnings per
share
|
|
|
$
|
0.49
|
|
$
|
0.66
|
Diluted earnings per
share
|
|
|
$
|
0.48
|
|
$
|
0.64
|
|
|
|
|
|
|
Weighted-average
shares outstanding:
|
|
|
|
|
|
Basic
|
|
|
114.4
|
|
116.4
|
Diluted
|
|
|
117.1
|
|
119.7
|
|
Amounts may not
sum due to rounding.
|
Condensed
Consolidated Balance Sheets
|
(Unaudited)
|
|
In millions,
except per share amounts
|
|
|
September
30,
2019
|
|
June
30,
2019
|
Assets
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
$
|
358.3
|
|
$
|
273.2
|
Accounts receivable,
net of allowance for doubtful accounts of $2.1 and $2.6,
respectively
|
|
|
600.7
|
|
664.0
|
Other current
assets
|
|
|
136.2
|
|
105.2
|
Total current
assets
|
|
|
1,095.1
|
|
1,042.3
|
Property, plant and
equipment, net
|
|
|
186.2
|
|
189.0
|
Goodwill
|
|
|
1,495.1
|
|
1,500.0
|
Intangible assets,
net
|
|
|
546.8
|
|
556.2
|
Other non-current
assets
|
|
|
896.9
|
|
593.1
|
Total
assets
|
|
|
$
|
4,220.1
|
|
$
|
3,880.7
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Current portion of
long-term debt
|
|
|
$
|
399.4
|
|
$
|
—
|
Payables and accrued
expenses
|
|
|
547.9
|
|
711.7
|
Contract
liabilities
|
|
|
93.5
|
|
90.9
|
Total current
liabilities
|
|
|
1,040.9
|
|
802.6
|
Long-term
debt
|
|
|
1,368.8
|
|
1,470.4
|
Deferred
taxes
|
|
|
96.0
|
|
86.7
|
Contract
liabilities
|
|
|
154.7
|
|
160.7
|
Other non-current
liabilities
|
|
|
416.3
|
|
232.8
|
Total
liabilities
|
|
|
3,076.6
|
|
2,753.2
|
Commitments and
contingencies
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
Preferred stock:
Authorized, 25.0 shares; issued and outstanding, none
|
|
|
—
|
|
—
|
Common stock, $0.01
par value: 650.0 shares authorized; 154.5 and 154.5 shares issued,
respectively; and 114.6 and 114.3 shares outstanding,
respectively
|
|
|
1.6
|
|
1.6
|
Additional paid-in
capital
|
|
|
1,131.1
|
|
1,109.3
|
Retained
earnings
|
|
|
2,082.0
|
|
2,087.7
|
Treasury stock, at
cost: 39.8 and 40.2 shares, respectively
|
|
|
(1,991.6)
|
|
(1,999.8)
|
Accumulated other
comprehensive loss
|
|
|
(79.5)
|
|
(71.2)
|
Total stockholders'
equity
|
|
|
1,143.4
|
|
1,127.5
|
Total liabilities and
stockholders' equity
|
|
|
$
|
4,220.1
|
|
$
|
3,880.7
|
|
Amounts may not
sum due to rounding.
|
Condensed
Consolidated Statements of Cash Flows
|
(Unaudited)
|
|
In
millions
|
Three Months
Ended
September 30,
|
|
2019
|
|
2018
|
Cash Flows From
Operating Activities
|
|
|
|
Net
earnings
|
$
|
55.9
|
|
$
|
76.7
|
Adjustments to
reconcile net earnings to net cash flows used in operating
activities:
|
|
|
|
Depreciation and
amortization
|
20.5
|
|
21.2
|
Amortization of
acquired intangibles and purchased intellectual property
|
28.1
|
|
21.9
|
Amortization of other
assets
|
22.8
|
|
21.6
|
Stock-based
compensation expense
|
11.8
|
|
10.7
|
Deferred income
taxes
|
7.5
|
|
(1.4)
|
Other
|
(11.0)
|
|
(5.4)
|
Changes in operating
assets and liabilities, net of assets and liabilities
acquired:
|
|
|
|
Current assets and
liabilities:
|
|
|
|
Decrease (increase)
in Accounts receivable, net
|
63.8
|
|
(1.0)
|
Increase in Other
current assets
|
(33.4)
|
|
(4.6)
|
Decrease in Payables
and accrued expenses
|
(190.5)
|
|
(199.3)
|
Increase (decrease)
in Contract liabilities
|
3.1
|
|
(4.0)
|
Non-current assets
and liabilities:
|
|
|
|
Increase in Other
non-current assets
|
(74.4)
|
|
(45.6)
|
Increase in Other
non-current liabilities
|
9.4
|
|
13.6
|
Net cash flows used
in operating activities
|
(86.4)
|
|
(95.5)
|
Cash Flows From
Investing Activities
|
|
|
|
Capital
expenditures
|
(14.1)
|
|
(8.7)
|
Software purchases
and capitalized internal use software
|
(6.2)
|
|
(6.8)
|
Acquisitions, net of
cash acquired
|
(48.1)
|
|
—
|
Other investing
activities
|
(17.9)
|
|
(0.8)
|
Net cash flows used
in investing activities
|
(86.3)
|
|
(16.3)
|
Cash Flows From
Financing Activities
|
|
|
|
Debt
proceeds
|
337.5
|
|
120.0
|
Debt
repayments
|
(40.0)
|
|
(30.0)
|
Dividends
paid
|
(55.4)
|
|
(42.5)
|
Purchases of Treasury
Stock
|
—
|
|
(1.1)
|
Proceeds from
exercise of stock options
|
18.5
|
|
7.6
|
Other financing
activities
|
(2.5)
|
|
0.1
|
Net cash flows
provided by financing activities
|
258.1
|
|
54.2
|
Effect of exchange
rate changes on Cash and cash equivalents
|
(0.2)
|
|
(1.6)
|
Net change in Cash
and cash equivalents
|
85.1
|
|
(59.3)
|
Cash and cash
equivalents, beginning of period
|
273.2
|
|
263.9
|
Cash and cash
equivalents, end of period
|
$
|
358.3
|
|
$
|
204.7
|
|
Amounts may not sum due to
rounding.
|
Segment
Results
|
(Unaudited)
|
|
In
millions
|
Three Months
Ended
September 30,
|
|
2019
|
|
2018
|
Revenues
|
|
Investor
Communication Solutions
|
$
|
702.6
|
|
|
$
|
755.0
|
|
Global Technology and
Operations
|
273.9
|
|
|
238.4
|
|
Foreign currency
exchange
|
(28.0)
|
|
|
(20.7)
|
|
Total
|
$
|
948.6
|
|
|
$
|
972.8
|
|
Earnings (Loss)
before Income Taxes
|
|
Investor
Communication Solutions
|
$
|
23.0
|
|
|
$
|
58.8
|
|
Global Technology and
Operations
|
56.4
|
|
|
46.5
|
|
Other
|
(21.1)
|
|
|
(23.2)
|
|
Foreign currency
exchange
|
5.6
|
|
|
7.1
|
|
Total
|
$
|
63.8
|
|
|
$
|
89.3
|
|
|
|
|
|
Pre-tax
margins:
|
|
|
|
Investor
Communication Solutions
|
3.3
|
%
|
|
7.8
|
%
|
Global Technology and
Operations
|
20.6
|
%
|
|
19.5
|
%
|
|
Amounts may not
sum due to rounding.
|
|
Note: The results
for the Company's Advisor Solutions services that were previously
reported in our Investor Communication Solutions reportable segment
are now reported within the Global Technology and Operations
reportable segment. As a result, our prior period segment results
have been revised to reflect this change in reporting
segments.
|
Supplemental
Reporting Detail - Additional Product Line Reporting
|
(Unaudited)
|
|
In
millions
|
Three Months
Ended
September 30,
|
Investor
Communication Solutions
|
2019
|
|
2018
|
|
Change
|
Equity
Proxy
|
$
|
29.8
|
|
$
|
31.0
|
|
(4)
|
%
|
Mutual fund and
exchange-traded funds ("ETF") interims
|
65.3
|
|
57.8
|
|
13
|
%
|
Customer
communications and fulfillment
|
170.9
|
|
174.9
|
|
(2)
|
%
|
Other ICS
|
83.2
|
|
73.4
|
|
13
|
%
|
Total ICS Recurring fee revenues
|
349.2
|
|
337.1
|
|
4
|
%
|
|
|
|
|
|
|
Equity and
other
|
17.5
|
|
24.1
|
|
(27)
|
%
|
Mutual
funds
|
22.6
|
|
52.8
|
|
(57)
|
%
|
Total ICS Event-driven fee revenues
|
40.1
|
|
76.9
|
|
(48)
|
%
|
|
|
|
|
|
|
Distribution
revenues
|
313.3
|
|
341.0
|
|
(8)
|
%
|
|
|
|
|
|
|
Total ICS
Revenues
|
$
|
702.6
|
|
$
|
755.0
|
|
(7)
|
%
|
|
|
|
|
|
|
Global Technology
and Operations
|
|
|
|
|
|
Equities and
Other
|
$
|
230.9
|
|
$
|
198.4
|
|
16
|
%
|
Fixed
income
|
43.1
|
|
40.0
|
|
8
|
%
|
Total GTO Recurring fee revenues
|
273.9
|
|
238.4
|
|
15
|
%
|
|
|
|
|
|
|
Foreign currency
exchange
|
(28.0)
|
|
(20.7)
|
|
35
|
%
|
Total Revenues
|
$
|
948.6
|
|
$
|
972.8
|
|
(2)
|
%
|
|
|
|
|
|
|
Revenues by
Type
|
|
|
|
|
|
Recurring fee
revenues
|
$
|
623.2
|
|
$
|
575.5
|
|
8
|
%
|
Event-driven fee
revenues
|
40.1
|
|
76.9
|
|
(48)
|
%
|
Distribution
revenues
|
313.3
|
|
341.0
|
|
(8)
|
%
|
Foreign currency
exchange
|
(28.0)
|
|
(20.7)
|
|
35
|
%
|
Total Revenues
|
$
|
948.6
|
|
$
|
972.8
|
|
(2)
|
%
|
|
Amounts may not
sum due to rounding.
|
|
Note: The results
for the Company's Advisor Solutions services that were previously
reported in our Investor Communication Solutions reportable segment
are now reported within the Global Technology and Operations
reportable segment. As a result, our prior period segment results
have been revised to reflect this change in reporting
segments.
|
Select Operating
Metrics
|
(Unaudited)
|
|
|
Three Months
Ended
September
30,
|
|
|
In
millions
|
2019
|
|
2018
|
|
%
Change
|
|
|
|
|
|
|
Closed
Sales
|
$37.6
|
|
$18.5
|
|
103%
|
|
|
|
|
|
|
Record
Growth1
|
|
|
|
|
|
Equity
proxy
|
7%
|
|
14%
|
|
|
Mutual fund
interims
|
1%
|
|
7%
|
|
|
|
|
|
|
|
|
Internal Trade
Growth2
|
|
|
|
|
|
Equity
|
(7)%
|
|
19%
|
|
|
Fixed
Income
|
19%
|
|
4%
|
|
|
|
|
|
|
|
Amounts may not
sum due to rounding.
|
|
|
|
|
|
1 Stock
record growth and interim record growth measure the annual change
in total positions eligible for equity proxies and mutual fund
& ETF interims, respectively, for equities and mutual fund
position data reported to Broadridge in both the current and prior
year periods.
|
|
2 Internal
trade growth represents the growth in trade volumes for clients
whose contracts are linked to trade volumes and who were on
Broadridge's trading platforms in both the current and prior year
periods.
|
|
|
|
|
|
|
Reconciliation of
Non-GAAP to GAAP Measures
|
(Unaudited)
|
|
In millions,
except per share amounts
|
Three Months
Ended
September 30,
|
|
2019
|
|
2018
|
Reconciliation of
Adjusted Operating Income
|
|
Operating income
(GAAP)
|
$
|
73.1
|
|
|
$
|
100.1
|
|
Adjustments:
|
|
|
|
Amortization of
Acquired Intangibles and Purchased Intellectual Property
|
28.1
|
|
|
21.9
|
|
Acquisition and
Integration Costs
|
2.5
|
|
|
0.9
|
|
Adjusted Operating
income (Non-GAAP)
|
$
|
103.7
|
|
|
$
|
122.9
|
|
Operating income
margin (GAAP)
|
7.7
|
%
|
|
10.3
|
%
|
Adjusted Operating
income margin (Non-GAAP)
|
10.9
|
%
|
|
12.6
|
%
|
|
|
Reconciliation of
Adjusted Net earnings
|
|
Net earnings
(GAAP)
|
$
|
55.9
|
|
|
$
|
76.7
|
|
Adjustments:
|
|
|
|
Amortization of
Acquired Intangibles and Purchased Intellectual Property
|
28.1
|
|
|
21.9
|
|
Acquisition and
Integration Costs
|
2.5
|
|
|
0.9
|
|
Taxable
adjustments
|
30.6
|
|
|
22.8
|
|
Tax impact of
adjustments (a)
|
(6.5)
|
|
|
(5.0)
|
|
Adjusted Net earnings
(Non-GAAP)
|
$
|
80.0
|
|
|
$
|
94.5
|
|
|
|
|
|
Reconciliation of
Adjusted EPS
|
|
|
|
Diluted earnings per
share (GAAP)
|
$
|
0.48
|
|
|
$
|
0.64
|
|
Adjustments:
|
|
|
|
Amortization of
Acquired Intangibles and Purchased Intellectual Property
|
0.24
|
|
|
0.18
|
|
Acquisition and
Integration Costs
|
0.02
|
|
|
0.01
|
|
Taxable
adjustments
|
0.26
|
|
|
0.19
|
|
Tax impact of
adjustments (a)
|
(0.06)
|
|
|
(0.04)
|
|
Adjusted earnings per
share (Non-GAAP)
|
$
|
0.68
|
|
|
$
|
0.79
|
|
|
|
Reconciliation of
Free Cash Flow
|
|
Net cash flows used
in operating activities (GAAP)
|
$
|
(86.4)
|
|
|
$
|
(95.5)
|
|
Capital expenditures
and Software purchases and capitalized internal use
software
|
(20.2)
|
|
|
(15.5)
|
|
Free cash flow
(Non-GAAP)
|
$
|
(106.7)
|
|
|
$
|
(111.0)
|
|
|
(a) Calculated
using the GAAP effective tax rate, adjusted to exclude excess tax
benefits associated with stock-based compensation of $5.7 million
in Q1 FY20 and $7.0 million in Q1 FY19. For purposes of calculating
the Adjusted earnings per share, the same adjustments were made on
a per share basis.
|
|
Amounts may not
sum due to rounding.
|
Fiscal Year 2020
Guidance
|
Reconciliation of
Non-GAAP to GAAP Measures
|
Adjusted Earnings
Per Share Growth and Adjusted Operating Income
Margin
|
(Unaudited)
|
|
|
|
|
|
|
FY20 Adjusted
Earnings Per Share Growth Rate (a)
|
|
|
Diluted earnings per
share (GAAP)
|
|
5% - 9%
growth
|
Adjusted earnings per
share (Non-GAAP)
|
|
8% - 12%
growth
|
|
|
|
FY20 Adjusted
Operating Income Margin (b)
|
|
|
Operating income
margin % (GAAP)
|
|
~15%
|
Adjusted Operating
income margin % (Non-GAAP)
|
|
~18%
|
|
|
|
|
(a) 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 2020 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 $0.81 per share.
|
|
(b) 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 2020 Non-GAAP Adjusted Operating income margin
guidance estimates exclude Amortization of Acquired Intangibles and
Purchased Intellectual Property, and Acquisition and Integration
Costs of approximately $124 million.
|
View original
content:http://www.prnewswire.com/news-releases/broadridge-reports-first-quarter-fiscal-year-2020-results-300952396.html
SOURCE Broadridge Financial Solutions, Inc.