NEW YORK, May 4, 2021 /PRNewswire/ -- Broadridge
Financial Solutions, Inc. (NYSE: BR) today reported financial
results for the third quarter and nine months ended March 31, 2021 of its fiscal year 2021. Results
compared with the same period last year were as follows:
Summary Financial
Results
|
|
Third
Quarter
|
|
Nine
Months
|
|
Dollars in
millions, except per share data
|
|
2021
|
2020
|
Change
|
2021
|
2020
|
Change
|
|
|
|
|
|
|
|
|
|
Recurring fee
revenues
|
|
$900
|
$835
|
8%
|
$2,267
|
$2,106
|
8%
|
Total
revenues
|
|
$1,390
|
$1,250
|
11%
|
$3,462
|
$3,167
|
9%
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
239
|
226
|
6%
|
397
|
326
|
22%
|
|
Operating income
margin
|
|
17.2%
|
18.1%
|
|
11.5%
|
10.3%
|
|
|
|
|
|
|
|
|
|
|
Adjusted Operating
income - Non-GAAP
|
|
284
|
262
|
8%
|
553
|
460
|
20%
|
|
Adjusted Operating
income margin - Non-
GAAP
|
|
20.4%
|
21.0%
|
|
16.0%
|
14.5%
|
|
|
|
|
|
|
|
|
|
|
Diluted
EPS
|
|
$1.40
|
$1.43
|
(2)%
|
$2.44
|
$1.99
|
23%
|
Adjusted EPS -
Non-GAAP
|
|
$1.76
|
$1.67
|
5%
|
$3.47
|
$2.88
|
20%
|
|
|
|
|
|
|
|
|
|
Closed
sales
|
|
$46
|
$44
|
3%
|
$124
|
$127
|
(2)%
|
"Broadridge delivered strong third quarter results, including 8%
recurring revenue growth and 8% Adjusted Operating income growth,"
said Tim Gokey, Broadridge's Chief
Executive Officer.
"Our results continue to be propelled by powerful long-term
trends including increased digitization, mutualization, and the
democratization of investing. As a result, we continue to
invest in our products and technology platforms. These investments,
along with the pending acquisition of Itiviti, will further
strengthen our ability to drive increased value to our clients and
growth to our shareholders," Mr. Gokey continued.
"Based on our strong performance, we are raising our top- and
bottom-line growth guidance for fiscal year 2021 and now expect
recurring revenue growth of 8-10% and Adjusted EPS growth of
11-13%. Looking beyond fiscal year 2021, Broadridge is
well-positioned for continued growth, and we remain confident in
our ability to deliver at the higher end of our three-year growth
objectives," Mr. Gokey concluded.
Fiscal Year 2021 Financial Guidance
|
|
FY'21
Guidance
|
|
|
Updates /
Changes
|
|
|
|
|
|
|
Recurring revenue
growth
|
|
8 - 10%
|
|
|
Raised from higher
end of 3-6%
|
Total revenue
growth
|
|
8 - 10%
|
|
|
Raised from higher
end of 1-4%
|
|
|
|
|
|
|
Adjusted Operating
income margin - Non-GAAP
|
|
~18%
|
|
|
No
change
|
|
|
|
|
|
|
Adjusted earnings per
share growth - Non-GAAP
|
|
11 - 13%
|
|
|
Raised from higher
end of 6-10%
|
|
|
|
|
|
|
Closed
sales
|
|
$190 -
235M
|
|
|
No
change
|
Financial Results for the Third Quarter Fiscal Year 2021
compared to Third Quarter Fiscal Year 2020
- Total revenues increased 11% to $1,390 million from $1,250
million in the prior year period.
-
- Recurring fee revenues increased 8% to $900 million from $835
million. The increase was primarily driven by growth from
onboarding of new business and internal growth. Internal growth of
3pts was driven by ICS.
- Event-driven fee revenues increased $35
million, or 89%, to $74
million, due to increased mutual fund proxy activity,
contests and other communications.
- Distribution revenues increased $37
million, or 9%, to $449
million, driven by an increase in the volume of event-driven
communications.
- Operating income was $239
million, an increase of $13
million, or 6%. Operating income margin decreased to 17.2%
compared to 18.1% for the prior year period.
-
- Adjusted Operating income was $284
million, an increase of $22
million, or 8%. Adjusted Operating income margin decreased
to 20.4%, compared to 21.0% for the prior year period. The increase
in Operating income and Adjusted Operating income was driven by an
increase in recurring and event-driven revenues, which more than
offset the impact of higher spending on growth initiatives.
- Interest expense, net was $12
million, a decrease of $4
million, driven by lower average interest rates on
borrowings and lower average debt outstanding.
- The effective tax rate was 23.9% compared to 20.7% in
the prior year period. The increase in the effective tax rate was
driven by the reduced impact of discrete tax items relative to
pre-tax income in the current period compared to the prior year
period.
- Net earnings decreased 1% to $165
million and Adjusted Net earnings increased 7% to
$208 million.
-
- Diluted earnings per share decreased 2% to $1.40, compared to $1.43 in the prior year period and Adjusted
earnings per share increased 5% to $1.76, compared to $1.67 in the prior year period.
Segment and Other Results for the Third Quarter Fiscal Year
2021 compared to Third Quarter Fiscal Year 2020
Investor Communication Solutions ("ICS")
- ICS total revenues were $1,109
million, an increase of $129
million, or 13%.
-
- Recurring fee revenues increased $57
million, or 11%, to $586
million. The increase was primarily attributable to revenues
from net new business (5pts) and internal growth (5pts). Internal
growth benefited from higher volume of equity proxy, mutual fund,
and exchange-traded fund communications partially offset by lower
interest rates on cash balances we hold for retirement accounts.
Acquisitions also contributed 1pt to growth.
- Event-driven fee revenues increased $35
million, or 89%, to $74
million, due to increased mutual fund proxy and equity proxy
contest activity.
- Distribution revenues increased $37
million, or 9%, to $449
million primarily from an increase in the volume of
event-driven communications.
- ICS earnings before income taxes were $219 million, an increase of $60 million, or 38%, primarily due to the
increase in Recurring fee revenues and event-driven fee revenues.
Pre-tax margins increased to 19.7% from 16.2%.
Global Technology and Operations ("GTO")
- GTO Recurring fee revenues were $314
million, an increase of $8
million, or 3%, driven by net new business. Internal growth
was impacted by higher equity trading volumes offset by lower
license sales.
- GTO earnings before income taxes were $62 million, a decrease of $6 million, or 8%, compared to $67 million in the prior year period. The
earnings decrease was driven by higher expenses related to client
conversions and spending on growth initiatives. Pre-tax margins
decreased to 19.7% from 22.1%.
Other
- Other Loss before income tax increased to $67 million from $18
million in the prior year period. The increased loss was
primarily due to (i) higher acquisition-related costs associated
with the pending acquisition of Itiviti Holding AB ("Itiviti"),
(ii) higher performance-based compensation expense, and (iii) spend
on growth and other initiatives.
Financial Results for the Nine Months Fiscal Year 2021
compared to the Nine Months Fiscal Year 2020
- Total revenues increased 9% to $3,462 million from $3,167
million in the prior year period.
-
- Recurring fee revenues increased 8% to $2,267 million from $2,106
million. The increase in Recurring fee revenues was driven
primarily by growth from onboarding of new business, internal
growth and the impact of acquisitions. Internal growth of 2pts was
driven by higher (i) ICS volume of equity proxy, mutual fund, and
exchange-traded fund communications, and (ii) GTO, primarily higher
equity trade volumes, partially offset by (iii) lower interest
rates on cash balances we hold for retirement accounts and lower
customer communication volumes.
- Event-driven fee revenues increased $54
million, or 49%, to $164
million, due to increased mutual fund proxy and other
communications.
- Distribution revenues increased $84
million, or 8%, to $1,126
million, driven by an increase in the volume of regulatory
and customer communications.
- Operating income was $397
million, an increase of $71
million, or 22%. Operating income margin increased to 11.5%
from 10.3% in the prior year period.
-
- Adjusted Operating income was $553
million, an increase of $93
million, or 20%. Adjusted Operating income margin increased
to 16.0%, compared to 14.5% for the prior year period.
- The increase in Operating income and Adjusted Operating income
was due to the impact of higher Recurring fee revenues and higher
event-driven fee revenues.
- Interest expense, net was $37
million, a decrease of $6
million, from lower average interest rates on
borrowings.
- The effective tax rate was 20.2% compared to 18.3% in
the prior year period. The increase in the effective tax rate was
driven by higher pre-tax earnings, which reduced the impact of
discrete tax items. Excess tax benefits attributable to stock-based
compensation were $15 million in the
current year period, compared to $10
million in the comparable prior year period.
- Net earnings increased 23% to $287 million and Adjusted Net earnings increased
21% to $408 million.
-
- Diluted earnings per share increased 23% to $2.44, compared to $1.99 in the prior year period and Adjusted
earnings per share increased 20% to $3.47, compared to $2.88 in the prior year period.
- The increases in Diluted earnings per share and Adjusted
earnings per share were primarily due to the increase in Recurring
fee revenues and higher event-driven fee revenues.
Segment and Other Results for the Nine Months Fiscal Year
2021 compared to the Nine Months Fiscal Year 2020
ICS
- ICS total revenues were $2,646
million, an increase of $248
million, or 10%.
-
- Recurring fee revenues increased $110
million, or 9%, to $1,356
million. The increase was attributable to revenues from net
new business (5pts) internal growth (2pts) and acquisitions (2pts).
Internal growth benefited from higher volume of equity proxy,
mutual fund and exchange-traded fund communications, partially
offset by lower interest rates on cash balances we hold for
retirement accounts and lower customer communication volumes.
- Event-driven fee revenues increased $54
million, or 49%, to $164
million, primarily from increased mutual fund proxy and
other communications.
- Distribution revenues increased $84
million, or 8%, to $1,126
million driven by an increase in the volume of regulatory
and customer communications.
- ICS earnings before income taxes were $314 million, an increase of $110 million, or 54%, primarily due to the
increase in Recurring fee revenues and event-driven fee revenues.
Pre-tax margins increased to 11.9% from 8.5%.
GTO
- GTO Recurring fee revenues were $912
million, an increase of $52
million, or 6%. The increase was attributable to the
combination of organic growth (5pts) and revenues from acquisitions
(1pt). Organic growth benefited from higher equity trading volumes
and onboarding of new clients.
- GTO earnings before income taxes were $192 million, an increase of $19 million, or 11%, compared to $173 million in the prior year period. The
earnings increase was driven by higher organic revenues. Expense
growth was driven by (i) spend on growth initiatives, (ii)
onboarding of new business and (iii) recent acquisitions, which
more than offset (iv) a decline in other expenses. Pre-tax margins
increased to 21.1% from 20.1%.
Other
- Other Loss before income tax increased 49% to $159 million from $107
million in the prior year period. The increased loss before
income taxes was primarily due to (i) costs associated with the
Company's real estate realignment initiative, including lease exit
and impairment charges and other facility exit costs of
$33 million, (ii) higher
performance-based compensation expense, (iii) higher
acquisition-related costs associated with the pending Itiviti
acquisition, and (iv) certain expenses associated with the Covid-19
pandemic, partially offset by (v) charges associated with the IBM
Private Cloud Agreement that occurred in the prior year
period.
Pending Acquisition of Itiviti
In March 2021, the Company signed
a definitive agreement to acquire 100% of the equity shares of
Itiviti. The total purchase price is approximately
$2.5 billion in cash, subject to
normal closing adjustments. The acquisition is subject to
customary closing conditions and regulatory approval and is
expected to close in the fourth quarter of fiscal year 2021.
The results of operations of the acquired business will be included
in the results of operations of the Global Technology and
Operations segment.
Earnings Conference Call
An analyst conference call will be held today, May 4, 2021 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 May 18, 2021,
the recording will also be available by dialing 1-877-344-7529
passcode: 10155380 within the United
States or 1-412-317-0088 passcode: 10155380 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. 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, and for internal planning
and forecasting purposes. 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, each
as adjusted to exclude the impact of certain costs, expenses, gains
and losses and other specified items the exclusion of which
management believes provides insight regarding our ongoing
operating performance. Depending on the period presented, these
adjusted measures exclude the impact of certain of the following
items: (i) Amortization of Acquired Intangibles and Purchased
Intellectual Property, (ii) Acquisition and Integration Costs,
(iii) IBM Private Cloud Charges, (iv) Real Estate Realignment and
Covid-19 Related Expenses, (v) Investment Gain, (vi) Software
Charge and (vii) Loss on Acquisition-Related Financial Instrument.
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. IBM Private
Cloud Charges represent a charge on the hardware assets transferred
to IBM and other charges related to the IBM Private Cloud
Agreement. Real Estate Realignment and Covid-19 Related Expenses
represent costs associated with the Company's real estate
realignment initiative, including lease exit and impairment charges
and other facility exit costs, as well as certain expenses
associated with the Covid-19 pandemic. The Covid-19 Related
Expenses are direct expenses incurred by the Company to protect the
health and safety of Broadridge associates, including the cost of
personal protective equipment, enhanced cleaning measures in our
facilities and other safety related expenses. Investment Gain
represents a non-operating, non-cash gain on a privately held
investment. Software Charge represents a charge related to an
internal use software product that is no longer expected to be
used. Loss on Acquisition-Related Financial Instrument
represents a non-operating loss on a financial instrument designed
to minimize the Company's foreign exchange risk associated with the
pending acquisition of Itiviti.
We exclude Acquisition and Integration Costs, IBM Private Cloud
Charges, Real Estate Realignment and Covid-19 Related Expenses, the
Investment Gain, the Software Charge and the Loss on
Acquisition-Related Financial Instrument from our Adjusted
Operating income (as applicable) and other adjusted earnings
measures because excluding such information provides us with an
understanding of the results from the primary operations of our
business and enhances comparability across fiscal reporting
periods, as these items are not reflective of our underlying
operations or performance. We also 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 plus
Proceeds from asset sales, 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 2021 Financial Guidance" section and
statements about our three-year objectives 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 described
and discussed in Part I, "Item 1A. Risk Factors" of our Annual
Report on Form 10-K for the year ended June
30, 2020 (the "2020 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 2020 Annual
Report.
These risks include:
- the potential impact and effects of the Covid-19 pandemic
("Covid-19") on the business of Broadridge, Broadridge's results of
operations and financial performance, any measures Broadridge has
and may take in response to Covid-19 and any expectations
Broadridge may have with respect thereto;
- 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 the demands of its clients;
- Broadridge's ability to attract and retain key personnel;
- the impact of new acquisitions and divestitures; and
- competitive conditions.
Factors related to the Itiviti acquisition (as defined below)
discussed in this press release that could cause actual results to
differ materially from those contemplated by the forward-looking
statements include:
- uncertainties as to the timing to consummate the acquisition of
Itiviti (the "Itiviti Acquisition");
- the risk that a condition to closing the Itiviti Acquisition
may not be satisfied or that the Itiviti Acquisition may not be
consummated;
- the risk that regulatory approvals are not obtained or are
obtained subject to conditions that are not anticipated by the
parties;
- potential litigation relating to the Itiviti Acquisition that
could be instituted;
- the effects of disruption to Broadridge's or the Itiviti
Holding AB and its subsidiaries' respective businesses;
- the impact of transaction costs;
- Broadridge's ability to achieve the benefits from the Itiviti
Acquisition;
- Broadridge's ability to effectively integrate the acquired
operations into its own operations;
- the ability of Broadridge to retain and hire key Itiviti
Holding AB and its subsidiaries' personnel;
- the effects of any unknown liabilities;
- the diversion of management time on transaction-related issues;
and
- the risk that a condition to funding under our committed
financing with respect to the Itiviti Acquisition may not be
satisfied and our failure to obtain any replacement financing
necessary to complete the Itiviti Acquisition.
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 (NYSE: BR), a global Fintech
leader with over $4.5 billion in
revenues, provides the critical infrastructure that powers
investing, corporate governance and communications to enable better
financial lives. We deliver technology-driven solutions to banks,
broker-dealers, asset and wealth managers and public companies.
Broadridge's infrastructure serves as a global communications hub
enabling corporate governance by linking thousands of public
companies and mutual funds to tens of millions of individual and
institutional investors around the world. In addition, Broadridge's
technology and operations platforms underpin the daily trading of
on average more than U.S. $10
trillion of equities, fixed income and other securities
globally. A certified Great Place to Work®, Broadridge is a part of
the S&P 500® Index, employing over 12,000 associates in 17
countries.
For more information about Broadridge, please visit
www.broadridge.com.
Contact Information
Investors:
|
Media:
|
W. Edings
Thibault
|
Gregg
Rosenberg
|
(516)
472-5129
|
(212)
918-6966
|
Condensed
Consolidated Statements of Earnings
(Unaudited)
|
|
In millions,
except per share amounts
|
|
|
Three Months
Ended
March
31,
|
|
Nine Months
Ended
March
31,
|
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Revenues
|
|
|
$
|
1,389.8
|
|
|
$
|
1,249.9
|
|
|
$
|
3,462.1
|
|
|
$
|
3,167.1
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
|
|
960.5
|
|
|
872.5
|
|
|
2,554.1
|
|
|
2,380.9
|
|
Selling, general and
administrative expenses
|
|
|
190.0
|
|
|
151.1
|
|
|
510.8
|
|
|
460.1
|
|
Total operating
expenses
|
|
|
1,150.6
|
|
|
1,023.7
|
|
|
3,064.8
|
|
|
2,841.0
|
|
Operating
income
|
|
|
239.2
|
|
|
226.3
|
|
|
397.3
|
|
|
326.1
|
|
Interest expense,
net
|
|
|
(11.8)
|
|
|
(16.2)
|
|
|
(37.3)
|
|
|
(43.2)
|
|
Other non-operating
income (expenses), net
|
|
|
(10.6)
|
|
|
0.4
|
|
|
(0.1)
|
|
|
1.8
|
|
Earnings before
income taxes
|
|
|
216.9
|
|
|
210.5
|
|
|
359.8
|
|
|
284.8
|
|
Provision for income
taxes
|
|
|
51.9
|
|
|
43.6
|
|
|
72.7
|
|
|
52.0
|
|
Net
earnings
|
|
|
$
|
165.0
|
|
|
$
|
166.8
|
|
|
$
|
287.1
|
|
|
$
|
232.8
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share
|
|
|
$
|
1.42
|
|
|
$
|
1.46
|
|
|
$
|
2.48
|
|
|
$
|
2.03
|
|
Diluted earnings per
share
|
|
|
$
|
1.40
|
|
|
$
|
1.43
|
|
|
$
|
2.44
|
|
|
$
|
1.99
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
115.8
|
|
|
114.6
|
|
|
115.6
|
|
|
114.6
|
|
Diluted
|
|
|
118.0
|
|
|
117.0
|
|
|
117.7
|
|
|
117.1
|
|
|
Amounts may not
sum due to rounding.
|
Condensed
Consolidated Balance Sheets
(Unaudited)
|
|
In millions,
except per share amounts
|
|
|
March 31,
2021
|
|
June 30,
2020
|
Assets
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
$
|
355.8
|
|
|
$
|
476.6
|
|
Accounts receivable,
net of allowance for doubtful accounts of
$8.2 and $9.8, respectively
|
|
|
871.0
|
|
|
711.3
|
|
Other current
assets
|
|
|
151.8
|
|
|
140.1
|
|
Total current
assets
|
|
|
1,378.6
|
|
|
1,328.0
|
|
Property, plant and
equipment, net
|
|
|
167.2
|
|
|
161.6
|
|
Goodwill
|
|
|
1,723.3
|
|
|
1,674.5
|
|
Intangible assets,
net
|
|
|
546.8
|
|
|
583.8
|
|
Other non-current
assets
|
|
|
1,370.9
|
|
|
1,141.9
|
|
Total
assets
|
|
|
$
|
5,186.8
|
|
|
$
|
4,889.8
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Current portion of
long-term debt
|
|
|
$
|
—
|
|
|
$
|
399.9
|
|
Payables and accrued
expenses
|
|
|
876.1
|
|
|
829.9
|
|
Contract
liabilities
|
|
|
126.5
|
|
|
111.2
|
|
Total current
liabilities
|
|
|
1,002.6
|
|
|
1,341.0
|
|
Long-term
debt
|
|
|
1,737.7
|
|
|
1,387.6
|
|
Deferred
taxes
|
|
|
157.4
|
|
|
126.8
|
|
Contract
liabilities
|
|
|
187.7
|
|
|
175.4
|
|
Other non-current
liabilities
|
|
|
511.9
|
|
|
512.4
|
|
Total
liabilities
|
|
|
3,597.4
|
|
|
3,543.2
|
|
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,
115.9 and 115.1 shares, respectively
|
|
|
1.6
|
|
|
1.6
|
|
Additional paid-in
capital
|
|
|
1,241.2
|
|
|
1,178.5
|
|
Retained
earnings
|
|
|
2,390.2
|
|
|
2,302.6
|
|
Treasury stock, at
cost: 38.6 and 39.3 shares, respectively
|
|
|
(2,019.6)
|
|
|
(2,035.7)
|
|
Accumulated other
comprehensive loss
|
|
|
(24.1)
|
|
|
(100.4)
|
|
Total stockholders'
equity
|
|
|
1,589.3
|
|
|
1,346.5
|
|
Total liabilities and
stockholders' equity
|
|
|
$
|
5,186.8
|
|
|
$
|
4,889.8
|
|
|
Amounts may not
sum due to rounding.
|
Condensed
Consolidated Statements of Cash Flows
(Unaudited)
|
|
Dollars in
millions
|
Nine Months
Ended
March 31,
|
|
2021
|
|
2020
|
Cash Flows From
Operating Activities
|
|
|
|
Net
earnings
|
$
|
287.1
|
|
|
$
|
232.8
|
|
Adjustments to
reconcile net earnings to net cash flows provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
47.6
|
|
|
56.5
|
|
Amortization of
acquired intangibles and purchased intellectual property
|
96.8
|
|
|
90.9
|
|
Amortization of other
assets
|
83.1
|
|
|
76.0
|
|
Write-down of
long-lived assets and related charges
|
34.7
|
|
|
32.1
|
|
Stock-based
compensation expense
|
46.4
|
|
|
47.6
|
|
Deferred income
taxes
|
24.2
|
|
|
9.7
|
|
Other
|
(36.5)
|
|
|
(16.0)
|
|
Changes in operating
assets and liabilities, net of assets and liabilities
acquired:
|
|
|
|
Current assets and
liabilities:
|
|
|
|
Increase in Accounts
receivable, net
|
(138.3)
|
|
|
(142.7)
|
|
Increase in Other
current assets
|
(21.7)
|
|
|
(21.7)
|
|
Increase (decrease) in
Payables and accrued expenses
|
1.6
|
|
|
(22.7)
|
|
Increase in Contract
liabilities
|
12.7
|
|
|
18.2
|
|
Non-current assets and
liabilities:
|
|
|
|
Increase in Other
non-current assets
|
(317.6)
|
|
|
(244.7)
|
|
Increase in Other
non-current liabilities
|
69.3
|
|
|
39.6
|
|
Net cash flows
provided by operating activities
|
189.5
|
|
|
155.6
|
|
Cash Flows From
Investing Activities
|
|
|
|
Capital
expenditures
|
(41.5)
|
|
|
(48.5)
|
|
Software purchases
and capitalized internal use software
|
(29.7)
|
|
|
(25.0)
|
|
Proceeds from asset
sales
|
18.0
|
|
|
—
|
|
Acquisitions, net of
cash acquired
|
—
|
|
|
(339.1)
|
|
Other investing
activities
|
(11.8)
|
|
|
(15.3)
|
|
Net cash flows used
in investing activities
|
(65.0)
|
|
|
(427.9)
|
|
Cash Flows From
Financing Activities
|
|
|
|
Debt
proceeds
|
725.0
|
|
|
1,575.3
|
|
Debt
repayments
|
(780.6)
|
|
|
(960.6)
|
|
Dividends
paid
|
(195.1)
|
|
|
(179.2)
|
|
Purchases of Treasury
stock
|
(1.0)
|
|
|
(50.5)
|
|
Proceeds from
exercise of stock options
|
33.9
|
|
|
26.4
|
|
Other financing
activities
|
(37.3)
|
|
|
(9.8)
|
|
Net cash flows
provided by (used in) financing activities
|
(255.1)
|
|
|
401.6
|
|
Effect of exchange
rate changes on Cash and cash equivalents
|
9.7
|
|
|
(0.4)
|
|
Net change in Cash
and cash equivalents
|
(120.8)
|
|
|
128.9
|
|
Cash and cash
equivalents, beginning of period
|
476.6
|
|
|
273.2
|
|
Cash and cash
equivalents, end of period
|
$
|
355.8
|
|
|
$
|
402.1
|
|
|
Amounts may not
sum due to rounding.
|
Segment
Results
(Unaudited)
|
|
In
millions
|
Three Months
Ended
March
31,
|
|
Nine Months
Ended
March
31,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Revenues
|
|
|
|
|
|
Investor
Communication Solutions
|
$
|
1,109.3
|
|
|
$
|
980.2
|
|
|
$
|
2,646.0
|
|
|
$
|
2,398.4
|
|
Global Technology and
Operations
|
313.5
|
|
|
305.5
|
|
|
911.9
|
|
|
860.3
|
|
Foreign currency
exchange
|
(33.1)
|
|
|
(35.8)
|
|
|
(95.8)
|
|
|
(91.6)
|
|
Total
|
$
|
1,389.8
|
|
|
$
|
1,249.9
|
|
|
$
|
3,462.1
|
|
|
$
|
3,167.1
|
|
|
Earnings (Loss)
before Income Taxes
|
|
|
|
|
|
Investor
Communication Solutions
|
$
|
219.0
|
|
|
$
|
159.2
|
|
|
$
|
314.1
|
|
|
$
|
204.3
|
|
Global Technology and
Operations
|
61.7
|
|
|
67.4
|
|
|
192.0
|
|
|
172.9
|
|
Other
|
(66.8)
|
|
|
(17.8)
|
|
|
(159.2)
|
|
|
(107.1)
|
|
Foreign currency
exchange
|
2.9
|
|
|
1.6
|
|
|
12.9
|
|
|
14.6
|
|
Total
|
$
|
216.9
|
|
|
$
|
210.5
|
|
|
$
|
359.8
|
|
|
$
|
284.8
|
|
|
|
|
|
|
|
|
|
Pre-tax
margins:
|
|
|
|
|
|
|
|
Investor Communication
Solutions
|
19.7
|
%
|
|
16.2
|
%
|
|
11.9
|
%
|
|
8.5
|
%
|
Global Technology and
Operations
|
19.7
|
%
|
|
22.1
|
%
|
|
21.1
|
%
|
|
20.1
|
%
|
|
Amounts may not
sum due to rounding.
|
Supplemental
Reporting Detail - Additional Product Line Reporting
(Unaudited)
|
|
In
millions
|
Three Months
Ended
March
31,
|
|
Nine Months
Ended
March
31,
|
Investor
Communication Solutions
|
2021
|
|
2020
|
|
Change
|
|
2021
|
|
2020
|
|
Change
|
Regulatory1
|
$
|
289.6
|
|
|
$
|
241.5
|
|
|
20
|
%
|
|
$
|
572.9
|
|
|
$
|
492.2
|
|
|
16
|
%
|
Data-driven fund
solutions1
|
89.6
|
|
|
88.9
|
|
|
1
|
%
|
|
261.2
|
|
|
249.3
|
|
|
5
|
%
|
Issuer1
|
44.3
|
|
|
34.6
|
|
|
28
|
%
|
|
82.8
|
|
|
68.1
|
|
|
22
|
%
|
Customer
communications1
|
163.0
|
|
|
164.0
|
|
|
(1)
|
%
|
|
438.7
|
|
|
436.1
|
|
|
1
|
%
|
Total ICS Recurring fee revenues
|
586.5
|
|
|
529.0
|
|
|
11
|
%
|
|
1,355.6
|
|
|
1,245.8
|
|
|
9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity and
other
|
40.4
|
|
|
22.1
|
|
|
83
|
%
|
|
79.5
|
|
|
54.9
|
|
|
45
|
%
|
Mutual
funds
|
33.4
|
|
|
17.0
|
|
|
96
|
%
|
|
85.0
|
|
|
55.3
|
|
|
54
|
%
|
Total ICS Event-driven fee revenues
|
73.8
|
|
|
39.1
|
|
|
89
|
%
|
|
164.5
|
|
|
110.3
|
|
|
49
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Distribution
revenues
|
449.1
|
|
|
412.1
|
|
|
9
|
%
|
|
1,126.0
|
|
|
1,042.4
|
|
|
8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Total ICS
Revenues
|
$
|
1,109.3
|
|
|
$
|
980.2
|
|
|
13
|
%
|
|
$
|
2,646.0
|
|
|
$
|
2,398.4
|
|
|
10
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Global Technology
and Operations
|
|
|
|
|
|
|
|
|
|
|
|
Capital
markets1
|
$
|
167.3
|
|
|
$
|
169.2
|
|
|
(1)
|
%
|
|
$
|
499.4
|
|
|
$
|
479.5
|
|
|
4
|
%
|
Wealth and investment
management1
|
146.2
|
|
|
136.2
|
|
|
7
|
%
|
|
412.4
|
|
|
380.8
|
|
|
8
|
%
|
Total GTO Recurring fee revenues
|
313.5
|
|
|
305.5
|
|
|
3
|
%
|
|
911.9
|
|
|
860.3
|
|
|
6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
exchange
|
(33.1)
|
|
|
(35.8)
|
|
|
(8)
|
%
|
|
(95.8)
|
|
|
(91.6)
|
|
|
5
|
%
|
Total Revenues
|
$
|
1,389.8
|
|
|
$
|
1,249.9
|
|
|
11
|
%
|
|
$
|
3,462.1
|
|
|
$
|
3,167.1
|
|
|
9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues by
Type
|
|
|
|
|
|
|
|
|
|
|
|
Recurring fee
revenues
|
$
|
900.0
|
|
|
$
|
834.5
|
|
|
8
|
%
|
|
$
|
2,267.5
|
|
|
$
|
2,106.1
|
|
|
8
|
%
|
Event-driven fee
revenues
|
73.8
|
|
|
39.1
|
|
|
89
|
%
|
|
164.5
|
|
|
110.3
|
|
|
49
|
%
|
Distribution
revenues
|
449.1
|
|
|
412.1
|
|
|
9
|
%
|
|
1,126.0
|
|
|
1,042.4
|
|
|
8
|
%
|
Foreign currency
exchange
|
(33.1)
|
|
|
(35.8)
|
|
|
(8)
|
%
|
|
(95.8)
|
|
|
(91.6)
|
|
|
5
|
%
|
Total Revenues
|
$
|
1,389.8
|
|
|
$
|
1,249.9
|
|
|
11
|
%
|
|
$
|
3,462.1
|
|
|
$
|
3,167.1
|
|
|
9
|
%
|
|
Amounts may not
sum due to rounding.
|
|
1 In the second quarter of
fiscal year 2021, the Company changed its presentation of
disaggregated revenue by product line disclosures to reflect
internal realignment of the Company's revenue reporting,
specifically as it relates to Recurring fee revenues. Presentation
of disaggregated revenue by product line disclosures in prior
periods have been changed to conform to the current period
presentation.
|
Select Operating
Metrics
(Unaudited)
|
|
|
Three Months
Ended
March
31,
|
|
|
|
Nine Months
Ended
March 31,
|
|
|
In
millions
|
2021
|
|
2020
|
|
%
Change
|
|
2021
|
|
2020
|
|
%
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
Closed
sales1
|
$45.6
|
|
$44.4
|
|
3%
|
|
$124.4
|
|
$127.1
|
|
(2)%
|
|
|
|
|
|
|
|
|
|
|
|
|
Record
Growth2
|
|
|
|
|
|
|
|
|
|
|
|
Equity
proxy
|
20%
|
|
7%
|
|
|
|
20%
|
|
8%
|
|
|
Mutual fund
interims
|
7%
|
|
—%
|
|
|
|
9%
|
|
3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Internal Trade
Growth3
|
12%
|
|
26%
|
|
|
|
16%
|
|
5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts may not
sum due to rounding.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1Refer to
the "Results of Operations" section of Broadridge's Form 10-Q for a
description of Closed sales and its calculation.
|
|
|
|
|
|
|
|
|
|
|
|
|
2Stock
record growth and interim record growth measure the estimated
annual change in total positions eligible for equity proxy
materials and mutual fund & ETF interim communications,
respectively, for equities and mutual fund position data reported
to Broadridge in both the current and prior year
periods.
|
|
|
|
|
|
|
|
|
|
|
|
|
3Internal
trade growth represents the estimate change 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
March
31,
|
|
Nine Months
Ended
March
31,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Reconciliation of
Adjusted Operating Income
|
|
Operating income
(GAAP)
|
$
|
239.2
|
|
$
|
226.3
|
|
$
|
397.3
|
|
$
|
326.1
|
Adjustments:
|
|
|
|
|
|
|
|
Amortization of
Acquired Intangibles and Purchased
Intellectual Property
|
31.9
|
|
32.5
|
|
96.8
|
|
90.9
|
Acquisition and
Integration Costs
|
9.2
|
|
3.0
|
|
11.6
|
|
9.0
|
IBM Private Cloud
Charges
|
—
|
|
0.2
|
|
—
|
|
33.6
|
Real Estate
Realignment and Covid-19 Related Expenses
|
3.3
|
|
—
|
|
41.1
|
|
—
|
Software
Charge
|
—
|
|
—
|
|
6.0
|
|
—
|
Adjusted Operating
income (Non-GAAP)
|
$
|
283.6
|
|
$
|
262.1
|
|
$
|
552.7
|
|
$
|
459.6
|
Operating income
margin (GAAP)
|
17.2%
|
|
18.1%
|
|
11.5%
|
|
10.3%
|
Adjusted Operating
income margin (Non-GAAP)
|
20.4%
|
|
21.0%
|
|
16.0%
|
|
14.5%
|
|
Reconciliation of
Adjusted Net earnings
|
|
Net earnings
(GAAP)
|
$
|
165.0
|
|
$
|
166.8
|
|
$
|
287.1
|
|
$
|
232.8
|
Adjustments:
|
|
|
|
|
|
|
|
|
Amortization of
Acquired Intangibles and Purchased
Intellectual Property
|
31.9
|
|
32.5
|
|
96.8
|
|
90.9
|
Acquisition and
Integration Costs
|
9.2
|
|
3.0
|
|
11.6
|
|
9.0
|
IBM Private Cloud
Charges
|
—
|
|
0.2
|
|
—
|
|
33.6
|
Real Estate
Realignment and Covid-19 Related Expenses
|
3.3
|
|
—
|
|
41.1
|
|
—
|
Investment
Gain
|
—
|
|
—
|
|
(8.7)
|
|
—
|
Software
Charge
|
—
|
|
—
|
|
6.0
|
|
—
|
Loss on
Acquisition-Related Financial Instrument
|
9.6
|
|
—
|
|
9.6
|
|
—
|
Subtotal of
adjustments
|
54.0
|
|
35.8
|
|
156.3
|
|
133.5
|
Tax impact of
adjustments (a)
|
(10.9)
|
|
(7.6)
|
|
(35.0)
|
|
(29.0)
|
Adjusted Net earnings
(Non-GAAP)
|
$
|
208.1
|
|
$
|
195.0
|
|
$
|
408.4
|
|
$
|
337.3
|
|
|
|
|
|
|
|
|
Reconciliation of
Adjusted EPS
|
|
|
|
|
|
|
|
Diluted earnings per
share (GAAP)
|
$
|
1.40
|
|
$
|
1.43
|
|
$
|
2.44
|
|
$
|
1.99
|
Adjustments:
|
|
|
|
|
|
|
|
Amortization of
Acquired Intangibles and Purchased
Intellectual Property
|
0.27
|
|
0.28
|
|
0.82
|
|
0.78
|
Acquisition and
Integration Costs
|
0.08
|
|
0.03
|
|
0.10
|
|
0.08
|
IBM Private Cloud
Charges
|
—
|
|
—
|
|
—
|
|
0.29
|
Real Estate
Realignment and Covid-19 Related Expenses
|
0.03
|
|
—
|
|
0.35
|
|
—
|
Investment
Gain
|
—
|
|
—
|
|
(0.07)
|
|
—
|
Software
Charge
|
—
|
|
—
|
|
0.05
|
|
—
|
Loss on
Acquisition-Related Financial Instrument
|
0.08
|
|
—
|
|
0.08
|
|
—
|
Subtotal of
adjustments
|
0.46
|
|
0.31
|
|
1.33
|
|
1.14
|
Tax impact of
adjustments (a)
|
(0.09)
|
|
(0.07)
|
|
(0.30)
|
|
(0.25)
|
Adjusted earnings per
share (Non-GAAP)
|
$
|
1.76
|
|
$
|
1.67
|
|
$
|
3.47
|
|
$
|
2.88
|
|
(a) Calculated using
the GAAP effective tax rate, adjusted to exclude excess tax
benefits associated with stock-based compensation of $1.7 million
and $14.6 million for the three and nine months ended March 31,
2021, and $1.9 million and $9.9 million for the three and nine
months ended March 31, 2020, respectively. For purposes of
calculating the Adjusted earnings per share, the same adjustments
were made on a per share basis. The tax impact of adjustments also
excludes approximately $8.5 million of Acquisition and Integration
Costs for the three and nine months ended March 31, 2021, which are
not tax-deductible. For purposes of calculating the Adjusted
earnings per share, the same adjustments were made on a per share
basis.
|
|
Nine Months
Ended
March
31,
|
|
2021
|
|
2020
|
Reconciliation of
Free Cash Flow
|
|
Net cash flows
provided by operating activities (GAAP)
|
$
|
189.5
|
|
|
$
|
155.6
|
|
Capital expenditures
and Software purchases and capitalized internal use
software
|
(71.2)
|
|
|
(73.5)
|
|
Proceeds from asset
sales
|
18.0
|
|
|
—
|
|
Free cash flow
(Non-GAAP)
|
$
|
136.3
|
|
|
$
|
82.2
|
|
|
Amounts may not
sum due to rounding.
|
Fiscal Year 2021
Guidance
Reconciliation of
Non-GAAP to GAAP Measures
Adjusted Earnings
Per Share Growth and Adjusted Operating Income
Margin
(Unaudited)
|
|
FY21 Adjusted
Earnings Per Share Growth Rate (a)
|
|
|
Diluted earnings per
share - GAAP
|
|
5 - 7%
growth
|
Adjusted earnings per
share - Non-GAAP
|
|
11 - 13%
growth
|
|
|
|
FY21 Adjusted
Operating Income Margin (b)
|
|
|
Operating income
margin % - GAAP
|
|
~14%
|
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, Acquisition and Integration Costs,
Real Estate Realignment and Covid-19 Related Expenses, Investment
Gain, Software Charge, and Loss on Acquisition-Related Financial
Instrument, and is calculated using diluted shares outstanding.
Fiscal year 2021 Non-GAAP Adjusted earnings per share guidance
estimates exclude, net of taxes, approximately $1.45 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, Acquisition and Integration Costs,
Real Estate Realignment and Covid-19 Related Expenses, and Software
Charge. Fiscal year 2021 Non-GAAP Adjusted Operating income margin
guidance estimates excludes approximately $215 million.
|
View original
content:http://www.prnewswire.com/news-releases/broadridge-reports-third-quarter-fiscal-year-2021-results-301282789.html
SOURCE Broadridge Financial Solutions, Inc.