NEW YORK, Feb. 1, 2022 /PRNewswire/
-- Broadridge Financial Solutions, Inc. (NYSE:BR) today
reported financial results for the second quarter ended
December 31, 2021 of its fiscal year
2022. Results compared with the same period last year were as
follows:
Summary Financial
Results
|
|
Second
Quarter
|
|
Six
Months
|
|
Dollars in
millions, except per share data
|
|
2022
|
2021
|
Change
|
2022
|
2021
|
Change
|
|
|
|
|
|
|
|
|
|
Recurring fee
revenues
|
|
$798
|
$673
|
19%
|
$1,548
|
$1,322
|
17%
|
Total
revenues
|
|
$1,260
|
$1,055
|
19%
|
$2,452
|
$2,072
|
18%
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
69
|
79
|
(13%)
|
172
|
158
|
9%
|
Margin
|
|
|
5.5%
|
7.5%
|
|
7.0%
|
7.6%
|
|
|
|
|
|
|
|
|
|
|
Adjusted Operating
income - Non-GAAP
|
|
141
|
119
|
19%
|
318
|
269
|
18%
|
Margin
|
|
|
11.2%
|
11.2%
|
|
12.9%
|
13.0%
|
|
|
|
|
|
|
|
|
|
|
Diluted
EPS
|
|
$0.40
|
$0.48
|
(17%)
|
$0.97
|
$1.04
|
(7%)
|
Adjusted EPS -
Non-GAAP
|
|
$0.82
|
$0.73
|
12%
|
$1.89
|
$1.70
|
11%
|
|
|
|
|
|
|
|
|
|
Closed
sales
|
|
$83
|
$44
|
87%
|
$113
|
$76
|
48%
|
"Broadridge delivered another strong quarter, with 19% recurring
fee revenues growth and 12% growth in Adjusted EPS," said
Tim Gokey, Broadridge's CEO. "We are
continuing to execute against our long-term growth plan across
Governance, Capital Markets and Wealth & Investment
Management."
"Our strong performance is enabling Broadridge to deliver steady
and consistent earnings growth and further increase our long-term
investments. We expect to deliver at the high end of our 12-15%
recurring fee revenues growth guidance and are reaffirming our
guidance for Adjusted EPS growth of 11-15%," Mr. Gokey
continued.
"Broadridge remains well positioned to deliver on the higher end
of our three-year growth objectives," he concluded.
Fiscal Year 2022
Financial Guidance
|
|
|
|
|
|
|
Prior FY'22
Guidance
|
Updates /
Changes
|
Recurring fee
revenues growth
|
|
12-15%
|
High
end
|
|
|
|
|
Adjusted Operating
income margin - Non-GAAP
|
|
~19%
|
~18.5%
|
|
|
|
|
Adjusted earnings per
share growth - Non-GAAP
|
|
11 - 15%
|
No change
|
|
|
|
|
Closed
sales
|
|
$240 -
280M
|
No change
|
Financial Results for Second Quarter Fiscal Year 2022
compared to Second Quarter Fiscal Year 2021
- Total revenues increased 19% to $1,260 million from $1,055
million in the prior year period.
-
- Recurring fee revenues increased 19% to $798 million from $673
million. The increase was driven by 6pts of net new business
and 4pts of internal growth. Growth from acquisitions was 9pts,
most notably from our recent Itiviti acquisition which closed in
May 2021.
- Event-driven fee revenues increased $20
million, or 44%, to $65
million, primarily due to increased mutual fund proxy
activity and mutual fund communications.
- Distribution revenues increased $58
million, or 17%, to $401
million, primarily due to the increase in customer
communications mailings and the recent postage rate increase.
- Operating income was $69
million, a decrease of $11
million, or 13%. Operating income margin decreased to 5.5%,
compared to 7.5% for the prior year period due to higher
amortization expense from acquired intangible assets, an increase
in low-margin distribution revenues, growth investments and other
expenses more than offsetting growth in recurring and event-driven
fee revenues.
-
- Adjusted Operating income was $141
million, an increase of $22
million, or 19%. The increase was driven by higher recurring
fee revenues, including from the acquisition of Itiviti, and
event-driven fee revenues, partially offset by growth investments
and other expenses. Adjusted Operating income margin was 11.2%
compared to 11.2% for the prior year period. The increase in
distribution revenues negatively impacted margins by 70 basis
points.
- Interest expense, net was $21
million, an increase of $10
million, driven by higher average debt outstanding resulting
from the fourth quarter fiscal year 2021 acquisition of
Itiviti.
- The effective tax rate was 9.1% compared to 18.9% in the
prior year period. The decrease in the effective tax rate was
driven by higher total discrete tax items.
- Net earnings decreased 16% to $47
million and Adjusted Net earnings increased 13% to
$97 million.
-
- Diluted earnings per share decreased 17% to $0.40, compared to $0.48 in the prior year period, and Adjusted
earnings per share increased 12% to $0.82, compared to $0.73 in the prior year period.
Segment and Other Results for Second Quarter Fiscal Year 2022
compared to Second Quarter Fiscal Year 2021
Investor Communication Solutions ("ICS")
- ICS total revenues were $893
million, an increase of $117
million, or 15%.
-
- Recurring fee revenues increased $40
million, or 10%, to $427
million. The increase was attributable to 6pts of revenue
from net new business and 4pts of revenue from internal growth.
Internal growth benefited from higher volumes of mutual fund and
exchange-traded fund communications.
- Event-driven fee revenues increased $20
million, or 44%, to $65
million, primarily due to increased mutual fund proxy
activity and mutual fund communications.
- Distribution revenues increased $58
million, or 17%, to $401
million primarily from an increase in customer communication
mailings and the recent postage rate increase.
- ICS earnings before income taxes were $59 million, an increase of $18 million, or 44%. The earnings increase was
due to an increase in Recurring fee revenues and Event-driven fee
revenues. Pre-tax margins increased to 6.6% from 5.3%. Amortization
expense from acquired intangibles decreased to $16 million in the second quarter of fiscal year
2022 from $22 million in the prior
period.
Global Technology and Operations ("GTO")
- GTO Recurring fee revenues were $371
million, an increase of $85
million, or 30%, driven primarily by 22pts of growth from
recent acquisitions, primarily Itiviti, as well as 8pts of organic
growth from onboarding of new clients and higher license
revenues.
- GTO earnings before income taxes were $34 million, a decrease of $14 million, or 29%. The earnings decrease was
driven by increased amortization of acquired intangibles and
increased expenditures to implement and support new business,
partially offset by contribution from higher recurring fee
revenues. Pre-tax margins decreased to 9.3% from 17.0%.
Amortization expense from acquired intangibles increased to
$48 million in the second quarter of
fiscal year 2022 from $11 million in
the prior year period primarily as a result of the Itiviti
acquisition.
Other
- Other loss before income tax increased to $40 million from $17
million in the prior year period, primarily due to higher
interest expense and higher spend on technology and other
initiatives.
Financial Results for the Six Months Fiscal Year 2022
compared to the Six Months Fiscal Year 2021
- Total revenues increased 18% to $2,452 million from $2,072
million in the prior year period.
-
- Recurring fee revenues increased 17% to $1,548 million from $1,322
million. The increase was driven by 5pts of net new business
and 3pts of internal growth. Growth from acquisitions was 9pts,
most notably from our recent Itiviti acquisition which closed in
May 2021.
- Event-driven fee revenues increased $51
million, or 57%, to $141
million, primarily due to increased mutual fund proxy
activity.
- Distribution revenues increased $93
million, or 14%, to $768
million, primarily due to the increase in customer
communications mailings and the recent postage rate increase.
- Operating income was $172
million, an increase of $14
million, or 9%. Operating income margin decreased to 7.0%,
compared to 7.6% for the prior year period due to higher
amortization expense from acquired intangible assets, an increase
in low-margin distribution revenues, growth investments and other
expenses more than offsetting growth in recurring and event-driven
fee revenues and the absence of the real estate realignment charge
that occurred in the prior year period.
-
- Adjusted Operating income was $318
million, an increase of $48
million, or 18%. The increase was driven by higher recurring
revenues, including from the acquisition of Itiviti, and
event-driven fee revenues, partially offset by growth investments
and other expenses. Adjusted Operating income margin was 12.9%
compared to 13.0% for the prior year period. The increase in
distribution revenues negatively impacted margins by 50 basis
points.
- Interest expense, net was $44
million, an increase of $18
million, driven by higher average debt outstanding resulting
from the fourth quarter fiscal year 2021 acquisition of
Itiviti.
- The effective tax rate was 12.1% compared to 14.6% in
the prior year period. The decrease in the effective tax rate was
driven by higher total discrete tax items.
- Net earnings decreased 6% to $114
million and Adjusted Net earnings increased 12% to
$224 million.
-
- Diluted earnings per share decreased 7% to $0.97, compared to $1.04 in the prior year period, and Adjusted
earnings per share increased 11% to $1.89, compared to $1.70 in the prior year period.
Segment and Other Results for the Six Months Fiscal Year 2022
compared to the Six Months Fiscal Year 2021
ICS
- ICS total revenues were $1,747
million, an increase of $225
million, or 15%.
-
- Recurring fee revenues increased $81
million, or 11%, to $837
million. The increase was attributable to 6pts of revenue
from net new business and 5pts of revenue from internal growth.
Internal growth benefited from higher volumes of mutual fund and
exchange-traded fund communications and equity proxies.
- Event-driven fee revenues increased $51
million, or 57%, to $141
million, primarily due to increased mutual fund proxy
activity.
- Distribution revenues increased $93
million, or 14%, to $768
million primarily due to an increase in customer
communication mailings and the recent postage rate increase.
- ICS earnings before income taxes were $141 million, an increase of $48 million, or 51%. The earnings increase was
due to an increase in Recurring fee revenues and Event-driven fee
revenues. Pre-tax margins increased to 8.1% from 6.1%. Amortization
expense from acquired intangibles decreased to $37 million in the first six months of fiscal
year 2022 from $44 million in the
prior period.
GTO
- GTO Recurring fee revenues were $711
million, an increase of $145
million, or 26%, driven primarily by 21pts of growth from
recent acquisitions, primarily Itiviti, as well as 5pts of organic
growth mainly from onboarding of new clients.
- GTO earnings before income taxes were $53 million, a decrease of $65 million, or 55%. The earnings decrease was
driven by increased amortization of acquired intangibles and
increased expenditures to implement and support new business,
partially offset by contribution from higher recurring fee
revenues. Pre-tax margins decreased to 7.5% from 20.9%.
Amortization expense from acquired intangibles increased to
$96 million in the first six months
of fiscal year 2022 from $21 million
in the prior year period primarily as a result of the Itiviti
acquisition.
Other
- Other loss before income tax improved to $61 million from $63
million in the prior year period, primarily due to the
absence of the $32 million real
estate realignment charge that occurred in the prior year period,
partially offset by higher interest expense due to an increase in
average debt outstanding and higher spend on technology and other
initiatives.
Earnings Conference Call
An analyst conference call will be held today, February 1, 2022 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 February 8,
2022, the recording will also be available by dialing
1-877-344-7529 within the United
States or 1-412-317-0088 for international callers, using
passcode 2652304 for either dial-in number.
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) Real Estate Realignment and Covid-19 Related Expenses, (iv)
Investment Gains, and (v) Software Charge. 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. 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. Investment Gains represent
non-operating, non-cash gains on privately held investments.
Software Charge represents a charge related to an internal use
software product that is no longer expected to be used.
We exclude Acquisition and Integration Costs, Real Estate
Realignment and Covid-19 Related Expenses, Investment Gains, and
the Software Charge 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," "on track," and other words
of similar meaning, are forward-looking statements. In particular,
information appearing in the "Fiscal Year 2022 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, 2021 (the "2021 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 2021 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 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 (NYSE: BR), a global Fintech
leader with $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. $9 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 13,000 associates in 21
countries. For more information about Broadridge, please visit
www.broadridge.com.
Contact
Information
|
|
|
Investors:
|
|
W. Edings
Thibault
|
Sean
Silva
|
(516)
472-5129
|
(332)
213-6371
|
|
|
Media:
|
|
Gregg
Rosenberg
|
|
(212)
918-6966
|
|
Condensed
Consolidated Statements of Earnings
(Unaudited)
|
|
In millions,
except per share amounts
|
|
Three Months
Ended
December 31,
|
|
Six Months
Ended
December 31,
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Revenues
|
|
$
1,259.6
|
|
$
1,054.9
|
|
$
2,452.5
|
|
$
2,072.3
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
|
978.4
|
|
806.5
|
|
1,892.5
|
|
1,593.5
|
Selling, general and
administrative expenses
|
|
212.3
|
|
169.0
|
|
387.8
|
|
320.7
|
Total operating
expenses
|
|
1,190.7
|
|
975.5
|
|
2,280.3
|
|
1,914.3
|
Operating
income
|
|
68.9
|
|
79.5
|
|
172.1
|
|
158.1
|
Interest expense,
net
|
|
(21.4)
|
|
(11.1)
|
|
(44.0)
|
|
(25.6)
|
Other non-operating
income, net
|
|
4.4
|
|
1.0
|
|
2.0
|
|
10.5
|
Earnings before
income taxes
|
|
51.9
|
|
69.4
|
|
130.1
|
|
143.0
|
Provision for income
taxes
|
|
4.7
|
|
13.1
|
|
15.7
|
|
20.9
|
Net
earnings
|
|
$
47.2
|
|
$
56.3
|
|
$
114.4
|
|
$
122.1
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share
|
|
$
0.40
|
|
$
0.49
|
|
$
0.98
|
|
$
1.06
|
Diluted earnings per
share
|
|
$
0.40
|
|
$
0.48
|
|
$
0.97
|
|
$
1.04
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
116.6
|
|
115.7
|
|
116.4
|
|
115.5
|
Diluted
|
|
118.7
|
|
117.8
|
|
118.5
|
|
117.6
|
|
Amounts may not
sum due to rounding.
|
Condensed
Consolidated Balance Sheets
(Unaudited)
|
|
In millions,
except per share amounts
|
|
|
December 31,
2021
|
|
June 30,
2021
|
Assets
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
$
281.2
|
|
$
274.5
|
Accounts receivable,
net of allowance for doubtful accounts of
$5.8 and $9.3, respectively
|
|
|
779.5
|
|
820.3
|
Other current
assets
|
|
|
205.9
|
|
166.4
|
Total current
assets
|
|
|
1,266.6
|
|
1,261.3
|
Property, plant and
equipment, net
|
|
|
169.7
|
|
177.2
|
Goodwill
|
|
|
3,663.8
|
|
3,720.1
|
Intangible assets,
net
|
|
|
1,253.0
|
|
1,425.0
|
Deferred client
conversion and start-up costs
|
|
|
994.9
|
|
773.7
|
Other non-current
assets
|
|
|
768.1
|
|
762.5
|
Total
assets
|
|
|
$
8,115.9
|
|
$
8,119.8
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Payables and accrued
expenses
|
|
|
$
878.6
|
|
$
1,102.7
|
Contract
liabilities
|
|
|
209.2
|
|
185.3
|
Total current
liabilities
|
|
|
1,087.8
|
|
1,288.0
|
Long-term
debt
|
|
|
4,156.6
|
|
3,887.6
|
Deferred
taxes
|
|
|
399.2
|
|
400.7
|
Contract
liabilities
|
|
|
200.1
|
|
197.2
|
Other non-current
liabilities
|
|
|
524.2
|
|
537.2
|
Total
liabilities
|
|
|
6,367.9
|
|
6,310.6
|
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, 116.8 and
116.1
shares, respectively
|
|
|
1.6
|
|
1.6
|
Additional paid-in
capital
|
|
|
1,307.7
|
|
1,245.5
|
Retained
earnings
|
|
|
2,549.1
|
|
2,583.8
|
Treasury stock, at
cost: 37.7 and 38.3 shares, respectively
|
|
|
(2,018.4)
|
|
(2,030.9)
|
Accumulated other
comprehensive income (loss)
|
|
|
(91.9)
|
|
9.2
|
Total stockholders'
equity
|
|
|
1,748.1
|
|
1,809.1
|
Total liabilities and
stockholders' equity
|
|
|
$
8,115.9
|
|
$
8,119.8
|
|
Amounts may not
sum due to rounding.
|
Condensed
Consolidated Statements of Cash Flows
(Unaudited)
|
|
In
millions
|
Six Months
Ended
December
31,
|
|
2021
|
|
2020
|
Cash Flows From
Operating Activities
|
|
|
|
Net
earnings
|
$
114.4
|
|
$
122.1
|
Adjustments to
reconcile net earnings to net cash flows (used in) provided by
operating activities:
|
|
|
|
Depreciation and
amortization
|
$
41.1
|
|
31.3
|
Amortization of
acquired intangibles and purchased intellectual property
|
131.2
|
|
64.9
|
Amortization of other
assets
|
66.3
|
|
52.9
|
Write-down of
long-lived assets and related charges
|
8.1
|
|
33.6
|
Stock-based
compensation expense
|
36.2
|
|
28.7
|
Deferred income
taxes
|
16.4
|
|
10.9
|
Other
|
(19.3)
|
|
(29.0)
|
Changes in operating
assets and liabilities, net of assets and liabilities
acquired:
|
|
|
|
Current assets and
liabilities:
|
|
|
|
Decrease in Accounts receivable, net
|
49.2
|
|
100.3
|
Increase in Other current assets
|
(32.5)
|
|
(35.7)
|
Decrease in Payables and accrued expenses
|
(236.5)
|
|
(140.2)
|
Increase in Contract liabilities
|
28.3
|
|
5.9
|
Non-current assets and
liabilities:
|
|
|
|
Increase in Other non-current assets
|
(321.5)
|
|
(211.2)
|
Increase in Other non-current liabilities
|
24.0
|
|
48.8
|
Net cash flows (used
in) provided by operating activities
|
(94.6)
|
|
83.3
|
Cash Flows From
Investing Activities
|
|
|
|
Capital
expenditures
|
(11.3)
|
|
(30.1)
|
Software purchases
and capitalized internal use software
|
(17.9)
|
|
(20.7)
|
Proceeds from asset
sales
|
—
|
|
18.0
|
Acquisitions, net of
cash acquired
|
(13.3)
|
|
—
|
Other investing
activities
|
(11.4)
|
|
(11.0)
|
Net cash flows used
in investing activities
|
(53.9)
|
|
(43.9)
|
Cash Flows From
Financing Activities
|
|
|
|
Debt
proceeds
|
480.0
|
|
660.0
|
Debt
repayments
|
(211.0)
|
|
(687.8)
|
Dividends
paid
|
(141.2)
|
|
(128.5)
|
Purchases of Treasury
stock
|
(1.7)
|
|
(0.8)
|
Proceeds from
exercise of stock options
|
40.5
|
|
27.6
|
Other financing
activities
|
(7.5)
|
|
(27.2)
|
Net cash flows
provided by (used in) financing activities
|
159.2
|
|
(156.6)
|
Effect of exchange
rate changes on Cash and cash equivalents
|
(4.1)
|
|
6.2
|
Net change in Cash
and cash equivalents
|
6.6
|
|
(111.0)
|
Cash and cash
equivalents, beginning of period
|
274.5
|
|
476.6
|
Cash and cash
equivalents, end of period
|
$
281.2
|
|
$
365.6
|
|
Amounts may not
sum due to rounding.
|
Segment
Results
(Unaudited)
|
|
In
millions
|
Three Months
Ended
December 31,
|
|
Six Months
Ended
December 31,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Revenues
|
|
|
|
|
|
Investor
Communication Solutions
|
$
893.3
|
|
$
776.0
|
|
$
1,746.8
|
|
$
1,521.5
|
Global Technology and
Operations
|
370.6
|
|
285.3
|
|
711.2
|
|
565.7
|
Foreign currency
exchange
|
(4.3)
|
|
(6.4)
|
|
(5.5)
|
|
(14.9)
|
Total
|
$
1,259.6
|
|
$
1,054.9
|
|
$
2,452.5
|
|
$
2,072.3
|
|
|
|
|
|
|
Earnings (Loss)
before Income Taxes
|
|
|
|
|
|
Investor
Communication Solutions
|
$
58.8
|
|
$
40.9
|
|
$
141.2
|
|
$
93.3
|
Global Technology and
Operations
|
34.4
|
|
48.6
|
|
53.1
|
|
118.5
|
Other
|
(39.7)
|
|
(17.3)
|
|
(61.2)
|
|
(63.2)
|
Foreign currency
exchange
|
(1.7)
|
|
(2.9)
|
|
(3.1)
|
|
(5.7)
|
Total
|
$
51.9
|
|
$
69.4
|
|
$
130.1
|
|
$
143.0
|
|
|
|
|
|
|
|
|
Pre-tax
margins:
|
|
|
|
|
|
|
|
Investor Communication
Solutions
|
6.6%
|
|
5.3%
|
|
8.1%
|
|
6.1%
|
Global Technology and
Operations
|
9.3%
|
|
17.0%
|
|
7.5%
|
|
20.9%
|
Amortization of
acquired intangibles and purchased intellectual
property
|
Investor
Communication Solutions
|
$
16.2
|
|
$
22.2
|
|
$
37.1
|
|
$
44.5
|
Global Technology and
Operations
|
47.6
|
|
10.7
|
|
96.0
|
|
21.4
|
Other
|
—
|
|
0.4
|
|
—
|
|
0.7
|
Foreign currency
exchange
|
(1.3)
|
|
(0.7)
|
|
(1.9)
|
|
(1.7)
|
Total
|
$
62.5
|
|
$
32.6
|
|
$
131.2
|
|
$
64.9
|
|
|
|
|
|
|
|
|
Amounts may not
sum due to rounding.
|
|
Beginning with the
first quarter of fiscal year 2022, the Company revised the foreign
exchange rates used to present segment revenues, segment earnings
(loss) before income taxes, and Closed sales, to further allocate
the foreign exchange impact to the individual segment revenue and
profit metrics. The presentation of segment revenues and
earnings (loss) before income taxes for the prior periods provided
has been changed to conform to the current period presentation.
Total consolidated revenues and earnings before income taxes were
not impacted. For additional information, please see the Company's
Form 8-K filed on September 27, 2021.
|
Supplemental
Reporting Detail - Additional Product Line Reporting
(Unaudited)
|
|
In
millions
|
Three Months
Ended
December 31,
|
|
Six Months
Ended
December 31,
|
|
2021
|
|
2020
|
|
%
Change
|
|
2021
|
|
2020
|
|
Change
|
Investor
Communication Solutions
|
|
|
|
|
|
|
|
|
|
|
|
Regulatory
|
$
166.4
|
|
$
144.7
|
|
15%
|
|
$
331.8
|
|
$
279.5
|
|
19%
|
Data-driven fund
solutions
|
88.8
|
|
86.1
|
|
3%
|
|
172.1
|
|
165.1
|
|
4%
|
Issuer
|
23.7
|
|
20.8
|
|
14%
|
|
44.2
|
|
38.5
|
|
15%
|
Customer
communications
|
148.2
|
|
135.8
|
|
9%
|
|
289.1
|
|
273.4
|
|
6%
|
Total ICS Recurring fee revenues
|
427.1
|
|
387.3
|
|
10%
|
|
837.3
|
|
756.5
|
|
11%
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity and
other
|
24.6
|
|
20.6
|
|
19%
|
|
52.2
|
|
38.7
|
|
35%
|
Mutual
funds
|
40.1
|
|
24.3
|
|
65%
|
|
88.9
|
|
51.4
|
|
73%
|
Total ICS Event-driven fee revenues
|
64.7
|
|
44.9
|
|
44%
|
|
141.1
|
|
90.0
|
|
57%
|
|
|
|
|
|
|
|
|
|
|
|
|
Distribution
revenues
|
401.5
|
|
343.8
|
|
17%
|
|
768.4
|
|
675.0
|
|
14%
|
|
|
|
|
|
|
|
|
|
|
|
|
Total ICS
Revenues
|
$
893.3
|
|
$
776.0
|
|
15%
|
|
$
1,746.8
|
|
$
1,521.5
|
|
15%
|
|
|
|
|
|
|
|
|
|
|
|
|
Global Technology
and Operations
|
|
|
|
|
|
|
|
|
|
|
|
Capital
markets
|
$
224.1
|
|
$
158.4
|
|
41%
|
|
$
433.5
|
|
$
314.7
|
|
38%
|
Wealth and investment
management
|
146.4
|
|
126.9
|
|
15%
|
|
277.7
|
|
251.0
|
|
11%
|
Total GTO Recurring fee revenues
|
370.6
|
|
285.3
|
|
30%
|
|
711.2
|
|
565.7
|
|
26%
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
exchange
|
(4.3)
|
|
(6.4)
|
|
(33%)
|
|
(5.5)
|
|
(14.9)
|
|
(63%)
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Revenues
|
$
1,259.6
|
|
$
1,054.9
|
|
19%
|
|
$
2,452.5
|
|
$
2,072.3
|
|
18%
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues by
Type
|
|
|
|
|
|
|
|
|
|
|
|
Recurring fee
revenues
|
$
797.6
|
|
$
672.6
|
|
19%
|
|
$
1,548.5
|
|
$
1,322.2
|
|
17%
|
Event-driven fee
revenues
|
64.7
|
|
44.9
|
|
44%
|
|
141.1
|
|
90.0
|
|
57%
|
Distribution
revenues
|
401.5
|
|
343.8
|
|
17%
|
|
768.4
|
|
675.0
|
|
14%
|
Foreign currency
exchange
|
(4.3)
|
|
(6.4)
|
|
(33%)
|
|
(5.5)
|
|
(14.9)
|
|
(63%)
|
Total Revenues
|
$
1,259.6
|
|
$
1,054.9
|
|
19%
|
|
$
2,452.5
|
|
$
2,072.3
|
|
18%
|
|
Amounts may not
sum due to rounding.
|
Select Operating
Metrics
(Unaudited)
|
|
|
Three Months
Ended
December 31,
|
|
|
|
Six Months
Ended
December 31,
|
|
|
In
millions
|
2021
|
|
2020
|
|
%
Change
|
|
2021
|
|
2020
|
|
%
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
Closed
sales1
|
$82.7
|
|
$44.3
|
|
87%
|
|
$112.6
|
|
$76.1
|
|
48%
|
|
|
|
|
|
|
|
|
|
|
|
|
Record
Growth2
|
|
|
|
|
|
|
|
|
|
|
|
Equity
proxy
|
20%
|
|
24%
|
|
|
|
29%
|
|
20%
|
|
|
Mutual fund
interims
|
12%
|
|
5%
|
|
|
|
13%
|
|
8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Internal Trade
Growth3
|
1%
|
|
24%
|
|
|
|
1%
|
|
17%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 and exchange-traded fund interim
communications, respectively, for equities and mutual fund position
data reported to Broadridge in both the current and prior year
periods.
|
|
|
|
|
|
|
|
|
|
|
|
|
3Represents the estimated change in daily
average 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
December 31,
|
|
Six Months
Ended December 31,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Reconciliation of
Adjusted Operating Income
|
|
Operating income
(GAAP)
|
$
68.9
|
|
$
79.5
|
|
$
172.1
|
|
$
158.1
|
Adjustments:
|
|
|
|
|
|
|
|
Amortization of
Acquired Intangibles and Purchased
Intellectual Property
|
62.5
|
|
32.6
|
|
131.2
|
|
64.9
|
Acquisition and
Integration Costs
|
7.8
|
|
0.7
|
|
10.7
|
|
2.4
|
Real Estate
Realignment and Covid-19 Related Expenses
|
1.7
|
|
5.8
|
|
3.5
|
|
37.8
|
Software
Charge
|
—
|
|
—
|
|
—
|
|
6.0
|
Adjusted Operating
income (Non-GAAP)
|
$
140.8
|
|
$
118.6
|
|
$
317.5
|
|
$
269.1
|
Operating income
margin (GAAP)
|
5.5%
|
|
7.5%
|
|
7.0%
|
|
7.6%
|
Adjusted Operating
income margin (Non-GAAP)
|
11.2%
|
|
11.2%
|
|
12.9%
|
|
13.0%
|
|
|
|
|
|
|
|
|
Reconciliation of
Adjusted Net earnings
|
|
Net earnings
(GAAP)
|
$
47.2
|
|
$
56.3
|
|
$
114.4
|
|
$
122.1
|
Adjustments:
|
|
|
|
|
|
|
|
Amortization of
Acquired Intangibles and Purchased
Intellectual Property
|
62.5
|
|
32.6
|
|
131.2
|
|
64.9
|
Acquisition and
Integration Costs
|
7.8
|
|
0.7
|
|
10.7
|
|
2.4
|
Real Estate
Realignment and Covid-19 Related Expenses
|
1.7
|
|
5.8
|
|
3.5
|
|
37.8
|
Investment
Gains
|
(7.5)
|
|
—
|
|
(7.5)
|
|
(8.7)
|
Software
Charge
|
—
|
|
—
|
|
—
|
|
6.0
|
Subtotal of
adjustments
|
64.4
|
|
39.1
|
|
137.8
|
|
102.3
|
Tax impact of
adjustments (a)
|
(14.3)
|
|
(9.5)
|
|
(28.7)
|
|
(24.1)
|
Adjusted Net earnings
(Non-GAAP)
|
$
97.3
|
|
$
85.9
|
|
$
223.5
|
|
$
200.3
|
|
|
|
|
|
|
|
|
Reconciliation of
Adjusted EPS
|
|
|
|
|
|
|
|
Diluted earnings per
share (GAAP)
|
$
0.40
|
|
$
0.48
|
|
$
0.97
|
|
$
1.04
|
Adjustments:
|
|
|
|
|
|
|
|
Amortization of
Acquired Intangibles and Purchased
Intellectual Property
|
0.53
|
|
0.28
|
|
1.11
|
|
0.55
|
Acquisition and
Integration Costs
|
0.07
|
|
0.01
|
|
0.09
|
|
0.02
|
Real Estate
Realignment and Covid-19 Related Expenses
|
0.01
|
|
0.05
|
|
0.03
|
|
0.32
|
Investment
Gains
|
(0.06)
|
|
—
|
|
(0.06)
|
|
(0.07)
|
Software
Charge
|
—
|
|
—
|
|
—
|
|
0.05
|
Subtotal of
adjustments
|
0.54
|
|
0.33
|
|
1.16
|
|
0.87
|
Tax impact of
adjustments (a)
|
(0.12)
|
|
(0.08)
|
|
(0.24)
|
|
(0.21)
|
Adjusted earnings per
share (Non-GAAP)
|
$
0.82
|
|
$
0.73
|
|
$
1.89
|
|
$
1.70
|
|
(a) Calculated using
the GAAP effective tax rate, adjusted to exclude $7.1 million and
$11.5 million of excess tax benefits associated with stock-based
compensation for the three and six months ended December 31, 2021,
respectively, and $3.6 million and $12.8 million of excess
tax benefits associated with stock-based compensation for the three
and six months ended December 31, 2020, respectively. For purposes
of calculating the Adjusted earnings per share, the same
adjustments were made on a per share basis.
|
|
Six Months
Ended
December 31,
|
|
2021
|
|
2020
|
Reconciliation of
Free Cash Flow
|
|
Net cash flows (used
in) provided by operating activities (GAAP)
|
$
(94.6)
|
|
$
83.3
|
Capital expenditures
and Software purchases and capitalized internal use
software
|
(29.2)
|
|
(50.8)
|
Proceeds from asset
sales
|
—
|
|
18.0
|
Free cash flow
(Non-GAAP)
|
$
(123.8)
|
|
$
50.5
|
|
|
|
|
Amounts may not
sum due to rounding.
|
2022
Guidance
Reconciliation of Non-GAAP to GAAP Measures
Adjusted Earnings Per Share Growth and Adjusted Operating Income
Margin
(Unaudited)
|
|
FY22 Adjusted
Earnings Per Share Growth Rate (a)
|
|
|
Diluted earnings per
share - GAAP
|
|
(5) - 0%
growth
|
Adjusted earnings per
share - Non-GAAP
|
|
11 - 15%
growth
|
|
|
|
FY22 Adjusted
Operating Income Margin (b)
|
|
|
Operating income
margin % - GAAP
|
|
~13.5%
|
Adjusted Operating
income margin % - Non-GAAP
|
|
~18.5%
|
|
|
|
(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, and
Investment Gains, and is calculated using diluted shares
outstanding. Fiscal year 2022 Non-GAAP Adjusted earnings per share
guidance estimates exclude, net of taxes, approximately $1.76 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,
and Real Estate Realignment and Covid-19 Related Expenses. Fiscal
year 2022 Non-GAAP Adjusted Operating income margin guidance
estimates excludes approximately $280 million.
|
View original
content:https://www.prnewswire.com/news-releases/broadridge-reports-second-quarter-fiscal-2022-results-301472124.html
SOURCE Broadridge Financial Solutions, Inc.