Increasing Fiscal Year 2022 Adjusted EPS
Growth Guidance to 13-15% from 11-15%
Recurring Revenues grew 16%
Diluted EPS was $1.49 and Adjusted EPS grew 10% to $1.93
Year-to-Date Closed sales grew 42%
NEW YORK, May 3, 2022 /PRNewswire/ -- Broadridge
Financial Solutions, Inc. (NYSE:BR) today reported financial
results for the third quarter ended March
31, 2022 of its fiscal year 2022. 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
|
|
2022
|
2021
|
Change
|
2022
|
2021
|
Change
|
|
|
|
|
|
|
|
|
|
Recurring fee
revenues
|
|
$1,012
|
$873
|
16%
|
$2,560
|
$2,195
|
17%
|
Total
revenues
|
|
$1,534
|
$1,390
|
10%
|
$3,986
|
$3,462
|
15%
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
$246
|
$239
|
3%
|
$418
|
$397
|
5%
|
Margin
|
|
|
16.0%
|
17.2%
|
|
10.5%
|
11.5%
|
|
|
|
|
|
|
|
|
|
|
Adjusted Operating
income - Non-GAAP
|
|
$313
|
$284
|
10%
|
$631
|
$553
|
14%
|
Margin
|
|
|
20.4%
|
20.4%
|
|
15.8%
|
16.0%
|
|
|
|
|
|
|
|
|
|
|
Diluted
EPS
|
|
$1.49
|
$1.40
|
6%
|
$2.46
|
$2.44
|
1%
|
Adjusted EPS -
Non-GAAP
|
|
$1.93
|
$1.76
|
10%
|
$3.81
|
$3.47
|
10%
|
|
|
|
|
|
|
|
|
|
Closed
sales
|
|
$58
|
$43
|
33%
|
$170
|
$119
|
42%
|
"Broadridge delivered another strong quarter, with 16% recurring
revenue and 10% Adjusted EPS growth," said Tim Gokey, Broadridge's CEO. "Our growth is
being propelled by long-term trends and by the continued execution
of our strategy.
"Broadridge is poised to deliver another year of strong growth.
Based on our strong performance to date and visibility into our
seasonally larger fourth quarter, we continue to expect fiscal year
2022 recurring revenue growth at the high end of our 12-15% range
and are increasing our expectations for Adjusted EPS growth to
13-15%, up from 11-15% previously.
"Our strong fiscal year 2022 results are building on the
double-digit top- and bottom-line growth we delivered in fiscal
year 2021, and Broadridge is well positioned to deliver at the
higher end of our three-year growth objectives."
Fiscal Year 2022
Financial Guidance
|
|
|
FY'22
Guidance
|
Updates /
Changes
|
Recurring fee
revenues growth
|
|
High end of
12-15%
|
No
change
|
Adjusted Operating
income margin - Non-GAAP
|
|
~18.5%
|
No
change
|
Adjusted earnings per
share growth - Non-GAAP
|
|
13 -
15%
|
Increasing from 11-15%
|
Closed
sales
|
|
$240 -
280M
|
No
change
|
Financial Results for Third Quarter Fiscal Year 2022 compared
to Third Quarter Fiscal Year 2021
- Total revenues increased 10% to $1,534 million from $1,390
million in the prior year period.
-
- Recurring fee revenues increased $139
million, or 16%, from $873
million. The increase was driven by 3pts of Net New Business
and 3pts of Internal Growth. Growth in Net New Business contributed
to growth in both ICS and GTO recurring fee revenues, while the
contribution from Internal Growth was driven by higher Record
Growth in our ICS business from equity positions of 17% and interim
positions of 10%. Growth from acquisitions of 9pts was primarily
driven by our Itiviti acquisition which closed in May 2021.
- Event-driven fee revenues decreased $14
million, or 20%, to $59
million, primarily due to the decrease in volume of equity
contest and other communications.
- Distribution revenues increased $25
million, or 6%, to $472
million, primarily driven by higher revenues from customer
communications, including the impact of a current year postage rate
increase of approximately $25
million, offset by lower volumes of regulatory
mailings.
- Operating income was $246
million, an increase of $7
million, or 3%. Operating income margin decreased to 16.0%,
compared to 17.2% 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 fee
revenues.
-
- Adjusted Operating income was $313 million, an increase of $30 million, or 10%. The increase was driven by
higher recurring fee revenues, including from the acquisition of
Itiviti, partially offset by growth investments and other expenses.
Adjusted Operating income margin was unchanged at 20.4%. An
increase in pass through distribution revenues negatively impacted
margins by 100 basis points.
- Interest expense, net was $20
million, an increase of $8
million, primarily due to an increase in debt outstanding
related to the May 2021 acquisition
of Itiviti.
- The effective tax rate was 21.0% compared to 23.9% in
the prior year period. The decrease in the effective tax rate was
driven by higher total discrete tax items.
- Net earnings increased 7% to $177
million and Adjusted Net earnings increased 10% to
$228 million.
-
- Diluted earnings per share increased 6% to $1.49, compared to $1.40 in the prior year period, and Adjusted
earnings per share increased 10% to $1.93, compared to $1.76 in the prior year period.
Segment and Other Results for Third Quarter Fiscal Year 2022
compared to Third Quarter Fiscal Year 2021
Investor Communication Solutions ("ICS")
- ICS total revenues were $1,161
million, an increase of $64
million, or 6%.
-
- Recurring fee revenues increased $53
million or 9%, to $630
million. The increase was attributable to 4pts of revenue
from Net New Business and 6pts of revenue from Internal Growth. The
Internal Growth contribution was driven by higher Record Growth
volume in equity positions of 17% and interim positions of
10%.
- Event-driven fee revenues decreased $14
million, or 20%, to $59
million, primarily due to the decrease in volume of equity
contest and other communications.
- Distribution revenues increased $25
million, or 6%, to $472
million primarily driven by higher revenues from customer
communications, including the impact of a current year postage rate
increase of approximately $25
million, offset by lower volumes of regulatory
mailings.
- ICS earnings before income taxes were $221 million, an increase of $5 million, or 3%. The increase was due to an
increase in recurring fee revenues. Pre-tax margins decreased to
19.0% from 19.6%. Amortization expense from acquired intangibles
decreased to $16 million in the third
quarter of fiscal year 2022 from $21
million in the prior period.
Global Technology and Operations ("GTO")
- GTO recurring fee revenues were $381
million, an increase of $85
million, or 29%, driven by 27pts of growth from recent
acquisitions, primarily Itiviti, as well as 3pts of Net New
Business from onboarding of new clients, partially offset by a 1pt
reduction in Internal Growth primarily resulting from a decline in
Internal Trade Growth.
- GTO earnings before income taxes were $50 million, a decrease of $6 million, or 10%. The decrease was driven
primarily by an increase of $86
million in operating costs from acquisitions, primarily as a
result of the Itiviti acquisition, as compared to revenue from
acquisitions of $81 million. Pre-tax
margins decreased to 13.1% from 18.7%. Amortization expense from
acquired intangibles increased to $47
million in the third 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 decreased to $45 million from $51
million in the prior year period, primarily due to
$19 million in lower
acquisition-related costs resulting from the fiscal year 2021
acquisition of Itiviti, partially offset by $8 million in higher interest expense due to an
increase in average debt outstanding related to the fiscal 2021
acquisition of Itiviti.
Financial Results for the Nine Months Fiscal Year 2022
compared to the Nine Months Fiscal Year 2021
- Total revenues increased 15% to $3,986 million from $3,462
million in the prior year period.
-
- Recurring fee revenues increased 17% to $2,560 million from $2,195
million, including 4 pts of growth from onboarding of Net
New Business, and 3 pts from Internal Growth. Growth in Net New
Business contributed to growth in both ICS and GTO recurring fee
revenues, while the contribution from Internal Growth was driven by
higher Record Growth in our ICS business from interim positions of
15% and equity positions of 21%. Growth from acquisitions was 9
pts, most notably from our Itiviti acquisition which closed in
May 2021.
- Event-driven fee revenues increased $37
million, or 22%, to $200
million, primarily due to increased mutual fund proxy
activity.
- Distribution revenues increased $119
million, or 11%, to $1,241
million, primarily driven by an increase in volume of
recurring fee revenue mailings, primarily customer communications
mailings, of $69 million, and a
current year postage rate increase which contributed an incremental
approximately $50 million to
distribution revenues.
- Operating income was $418
million, an increase of $21
million, or 5%. Operating income margin decreased to 10.5%,
compared to 11.5% 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 and the absence of the real estate realignment charge
that occurred in the prior year period.
-
- Adjusted Operating income was $631 million, an increase of $78 million, or 14%. 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 15.8% compared to 16.0% for the prior year period. An increase
in pass through distribution revenues negatively impacted margins
by 70 basis points.
- Interest expense, net was $64
million, an increase of $27
million, primarily due to an increase in debt outstanding
related to the May 2021 acquisition
of Itiviti.
- The effective tax rate was 17.7% compared to 20.2% in
the prior year period. The decrease in the effective tax rate was
driven by higher total discrete tax items.
- Net earnings increased 1% to $291
million and Adjusted Net earnings increased 11% to
$452 million.
-
- Diluted earnings per share increased 1% to $2.46, compared to $2.44 in the prior year period, and Adjusted
earnings per share increased 10% to $3.81, compared to $3.47 in the prior year period.
Segment and Other Results for the Nine Months Fiscal Year
2022 compared to the Nine Months Fiscal Year 2021
ICS
- ICS total revenues were $2,908
million, an increase of $290
million, or 11%.
-
- Recurring fee revenues increased $134
million, or 10%, to $1,468
million. The increase was attributable to 5pts of revenue
from Net New Business and 5pts of revenue from Internal Growth. The
contribution from Internal Growth was driven by higher Record
Growth in interim positions of 15% and equity positions of
21%.
- Event-driven fee revenues increased $37
million, or 22%, to $200
million, primarily due to increased volume of mutual fund
proxy activity.
- Distribution revenues increased $119
million, or 11%, to $1,241
million primarily driven by an increase in volume of
recurring fee revenue mailings, primarily customer communications
mailings, of $69 million, and the
current year postage rate increase which contributed an incremental
approximately $50 million to
distribution revenues.
- ICS earnings before income taxes were $362 million, an increase of $53 million, or 17%. The increase was driven by
higher recurring and event-driven fee revenues. Amortization
expense from acquired intangibles decreased to $53 million in the first nine months of fiscal
year 2022 from $66 million in the
prior period. Pre-tax margins increased to 12.4% from 11.8%.
GTO
- GTO recurring fee revenues were $1,093
million, an increase of $231
million, or 27%, driven primarily by 23pts of growth from
recent acquisitions, primarily Itiviti, as well as 3pts of Net New
Business from onboarding of new clients.
- GTO earnings before income taxes were $103 million, a decrease of $71 million, or 41%. The decrease was primarily
driven by an increase of $250 million
in operating costs from acquisitions primarily as a result of the
Itiviti acquisition, as compared to revenue from acquisitions of
$198 million, as well as increased
investments to implement and support new business. Pre-tax margins
decreased to 9.4% from 20.2%. Amortization expense from acquired
intangibles increased to $143 million
in the first nine months of fiscal year 2022 from $32 million in the prior year period primarily as
a result of the fiscal 2021 Itiviti acquisition.
Other
- Other loss before income tax improved to $106 million from $114
million in the prior year period, primarily due to lower
real estate realignment charges of $32
million related to the Company's closure of certain real
estate facilities in response to the Covid-19 pandemic, and
$18 million in lower
acquisition-related costs driven primarily by the fiscal 2021
acquisition of Itiviti, partially offset by higher interest expense
of $27 million due to an increase in
average debt outstanding related to the fiscal 2021 acquisition of
Itiviti, and $10 million in lower net
investment gains.
Earnings Conference Call
An analyst conference call will be held today, May 3, 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 May 10, 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 3051064
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, (v) Software Charge, and (vi) 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. Real Estate Realignment and Covid-19
Related Expenses are comprised of two major components: Real Estate
Realignment Expenses, and Covid-19 Related Expenses. Real Estate
Realignment Expenses are expenses associated with the exit of
certain of the Company's leased facilities in response to the
Covid-19 pandemic, which consist of the impairment of certain right
of use assets, leasehold improvements and equipment, as well as
other related facility exit expenses directly resulting from, and
attributable to, the exit of these leased facilities. Covid-19
Related Expense are direct and incremental expenses incurred by the
Company to protect the health and safety of Broadridge associates
during the Covid-19 outbreak, including expenses associated with
monitoring the temperatures for associates entering our facilities,
enhancing the safety of our office environment in preparation for
workers to return to Company facilities on a more regular basis,
ensuring proper social distancing in our production facilities,
personal protective equipment, enhanced cleaning measures in our
facilities, and other safety related expenses. 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. 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 acquisition
of Itiviti.
We exclude Acquisition and Integration Costs, Real Estate
Realignment and Covid-19 Related Expenses, Investment Gains, 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," "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, economic and geopolitical 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 14,000 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
March 31,
|
|
Nine Months
Ended
March 31,
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Revenues
|
|
$
1,533.7
|
|
$
1,389.8
|
|
$
3,986.2
|
|
$
3,462.1
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
|
1,077.6
|
|
960.5
|
|
2,970.1
|
|
2,554.1
|
Selling, general and
administrative expenses
|
|
210.1
|
|
190.0
|
|
597.9
|
|
510.8
|
Total operating
expenses
|
|
1,287.7
|
|
1,150.6
|
|
3,568.0
|
|
3,064.8
|
Operating
income
|
|
246.0
|
|
239.2
|
|
418.2
|
|
397.3
|
Interest expense,
net
|
|
(20.0)
|
|
(11.8)
|
|
(64.0)
|
|
(37.3)
|
Other non-operating
expense, net
|
|
(2.7)
|
|
(10.6)
|
|
(0.7)
|
|
(0.1)
|
Earnings before
income taxes
|
|
223.3
|
|
216.9
|
|
353.4
|
|
359.8
|
Provision for income
taxes
|
|
46.8
|
|
51.9
|
|
62.4
|
|
72.7
|
Net
earnings
|
|
$
176.6
|
|
$
165.0
|
|
$
291.0
|
|
$
287.1
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share
|
|
$
1.51
|
|
$
1.42
|
|
$
2.50
|
|
$
2.48
|
Diluted earnings per
share
|
|
$
1.49
|
|
$
1.40
|
|
$
2.46
|
|
$
2.44
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
116.8
|
|
115.8
|
|
116.5
|
|
115.6
|
Diluted
|
|
118.6
|
|
118.0
|
|
118.5
|
|
117.7
|
|
Amounts may not
sum due to rounding.
|
Condensed
Consolidated Balance Sheets (Unaudited)
|
|
In millions,
except per share amounts
|
|
|
March 31,
2022
|
|
June 30,
2021
|
Assets
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
$
277.2
|
|
$
274.5
|
Accounts receivable,
net of allowance for doubtful accounts of
$5.2 and $9.3, respectively
|
|
|
988.0
|
|
820.3
|
Other current
assets
|
|
|
229.9
|
|
166.4
|
Total current
assets
|
|
|
1,495.1
|
|
1,261.3
|
Property, plant and
equipment, net
|
|
|
164.7
|
|
177.2
|
Goodwill
|
|
|
3,578.4
|
|
3,720.1
|
Intangible assets,
net
|
|
|
1,170.5
|
|
1,425.0
|
Deferred client
conversion and start-up costs
|
|
|
1,122.3
|
|
773.7
|
Other non-current
assets
|
|
|
818.4
|
|
762.5
|
Total
assets
|
|
|
$
8,349.5
|
|
$
8,119.8
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Payables and accrued
expenses
|
|
|
$
965.8
|
|
$
1,102.7
|
Contract
liabilities
|
|
|
211.1
|
|
185.3
|
Total current
liabilities
|
|
|
1,176.8
|
|
1,288.0
|
Long-term
debt
|
|
|
4,167.0
|
|
3,887.6
|
Deferred
taxes
|
|
|
428.3
|
|
400.7
|
Contract
liabilities
|
|
|
219.9
|
|
197.2
|
Other non-current
liabilities
|
|
|
536.4
|
|
537.2
|
Total
liabilities
|
|
|
6,528.4
|
|
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, 116.9 and
116.1
shares, respectively
|
|
|
1.6
|
|
1.6
|
Additional paid-in
capital
|
|
|
1,333.4
|
|
1,245.5
|
Retained
earnings
|
|
|
2,650.9
|
|
2,583.8
|
Treasury stock, at
cost: 37.6 and 38.3 shares, respectively
|
|
|
(2,015.3)
|
|
(2,030.9)
|
Accumulated other
comprehensive income (loss)
|
|
|
(149.5)
|
|
9.2
|
Total stockholders'
equity
|
|
|
1,821.0
|
|
1,809.1
|
Total liabilities and
stockholders' equity
|
|
|
$
8,349.5
|
|
$
8,119.8
|
|
Amounts may not
sum due to rounding.
|
Condensed
Consolidated Statements of Cash
Flows (Unaudited)
|
|
In
millions
|
Nine Months
Ended
March
31,
|
|
2022
|
|
2021
|
Cash Flows From
Operating Activities
|
|
|
|
Net
earnings
|
$
291.0
|
|
$
287.1
|
Adjustments to
reconcile net earnings to net cash flows (used in) provided by
operating activities:
|
|
|
|
Depreciation and
amortization
|
$
62.4
|
|
47.6
|
Amortization of
acquired intangibles and purchased intellectual property
|
192.0
|
|
96.8
|
Amortization of other
assets
|
97.6
|
|
83.1
|
Write-down of
long-lived assets and related charges
|
9.5
|
|
34.7
|
Stock-based
compensation expense
|
54.8
|
|
46.4
|
Deferred income
taxes
|
47.7
|
|
24.2
|
Other
|
(17.8)
|
|
(36.5)
|
Changes in operating
assets and liabilities, net of assets and liabilities
acquired:
|
|
|
|
Current assets and
liabilities:
|
|
|
|
Increase in Accounts receivable, net
|
(134.7)
|
|
(138.3)
|
Increase in Other current assets
|
(54.1)
|
|
(21.7)
|
Increase (Decrease) in Payables and accrued expenses
|
(152.7)
|
|
1.6
|
Increase in Contract liabilities
|
36.1
|
|
12.7
|
Non-current assets and
liabilities:
|
|
|
|
Increase in Other non-current assets
|
(515.0)
|
|
(317.6)
|
Increase in Other non-current liabilities
|
69.3
|
|
69.3
|
Net cash flows (used
in) provided by operating activities
|
(13.9)
|
|
189.5
|
Cash Flows From
Investing Activities
|
|
|
|
Capital
expenditures
|
(21.9)
|
|
(41.5)
|
Software purchases
and capitalized internal use software
|
(32.5)
|
|
(29.7)
|
Proceeds from asset
sales
|
—
|
|
18.0
|
Acquisitions, net of
cash acquired
|
(13.3)
|
|
—
|
Other investing
activities
|
(13.2)
|
|
(11.8)
|
Net cash flows used
in investing activities
|
(81.0)
|
|
(65.0)
|
Cash Flows From
Financing Activities
|
|
|
|
Debt
proceeds
|
600.0
|
|
725.0
|
Debt
repayments
|
(320.5)
|
|
(780.6)
|
Dividends
paid
|
(215.9)
|
|
(195.1)
|
Purchases of Treasury
stock
|
(2.1)
|
|
(1.0)
|
Proceeds from
exercise of stock options
|
50.4
|
|
33.9
|
Other financing
activities
|
(8.2)
|
|
(37.3)
|
Net cash flows
provided by (used in) financing activities
|
103.6
|
|
(255.1)
|
Effect of exchange
rate changes on Cash and cash equivalents
|
(6.0)
|
|
9.7
|
Net change in Cash
and cash equivalents
|
2.7
|
|
(120.8)
|
Cash and cash
equivalents, beginning of period
|
274.5
|
|
476.6
|
Cash and cash
equivalents, end of period
|
$
277.2
|
|
$
355.8
|
|
Amounts may not
sum due to rounding.
|
Segment
Results (Unaudited)
|
|
In
millions
|
Three Months
Ended
March
31,
|
|
Nine Months
Ended
March
31,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Revenues
|
|
|
|
|
|
Investor
Communication Solutions
|
$
1,161.4
|
|
$
1,097.1
|
|
$
2,908.2
|
|
$
2,618.6
|
Global Technology and
Operations
|
381.5
|
|
296.1
|
|
1,092.6
|
|
861.8
|
Foreign currency
exchange
|
(9.1)
|
|
(3.4)
|
|
(14.6)
|
|
(18.3)
|
Total
|
$
1,533.7
|
|
$
1,389.8
|
|
$
3,986.2
|
|
$
3,462.1
|
|
|
|
|
|
|
Earnings (Loss)
before Income Taxes
|
|
|
|
|
|
Investor
Communication Solutions
|
$
220.7
|
|
$
215.2
|
|
$
361.9
|
|
$
308.5
|
Global Technology and
Operations
|
49.8
|
|
55.4
|
|
102.9
|
|
173.9
|
Other
|
(44.5)
|
|
(51.1)
|
|
(105.7)
|
|
(114.3)
|
Foreign currency
exchange
|
(2.5)
|
|
(2.7)
|
|
(5.6)
|
|
(8.3)
|
Total
|
$
223.3
|
|
$
216.9
|
|
$
353.4
|
|
$
359.8
|
|
|
|
|
|
|
|
|
Pre-tax
margins:
|
|
|
|
|
|
|
|
Investor Communication
Solutions
|
19.0%
|
|
19.6%
|
|
12.4%
|
|
11.8%
|
Global Technology and
Operations
|
13.1%
|
|
18.7%
|
|
9.4%
|
|
20.2%
|
|
Amortization of
acquired intangibles and purchased intellectual
property
|
Investor
Communication Solutions
|
$
16.2
|
|
$
21.2
|
|
$
53.3
|
|
$
65.6
|
Global Technology and
Operations
|
47.2
|
|
10.7
|
|
143.2
|
|
32.1
|
Other
|
—
|
|
0.4
|
|
—
|
|
1.1
|
Foreign currency
exchange
|
(2.6)
|
|
(0.3)
|
|
(4.5)
|
|
(2.0)
|
Total
|
$
60.8
|
|
$
31.9
|
|
$
192.0
|
|
$
96.8
|
|
|
|
|
|
|
|
|
|
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
March
31,
|
|
Nine Months
Ended
March
31,
|
|
2022
|
|
2021
|
|
%
Change
|
|
2022
|
|
2021
|
|
Change
|
Investor
Communication Solutions
|
|
|
|
|
|
|
|
|
|
|
|
Regulatory
|
$
321.7
|
|
$
285.3
|
|
13%
|
|
$
653.5
|
|
$
564.8
|
|
16%
|
Data-driven fund
solutions
|
90.7
|
|
85.9
|
|
6%
|
|
262.9
|
|
251.0
|
|
5%
|
Issuer
|
46.3
|
|
44.1
|
|
5%
|
|
90.6
|
|
82.6
|
|
10%
|
Customer
communications
|
171.5
|
|
161.6
|
|
6%
|
|
460.6
|
|
435.0
|
|
6%
|
Total ICS Recurring fee revenues
|
630.2
|
|
576.9
|
|
9%
|
|
1,467.5
|
|
1,333.4
|
|
10%
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity and
other
|
25.0
|
|
39.9
|
|
(37%)
|
|
77.2
|
|
78.6
|
|
(2%)
|
Mutual
funds
|
33.7
|
|
33.2
|
|
2%
|
|
122.6
|
|
84.6
|
|
45%
|
Total ICS Event-driven fee revenues
|
58.7
|
|
73.1
|
|
(20%)
|
|
199.8
|
|
163.2
|
|
22%
|
|
|
|
|
|
|
|
|
|
|
|
|
Distribution
revenues
|
472.4
|
|
447.0
|
|
6%
|
|
1,240.9
|
|
1,122.0
|
|
11%
|
|
|
|
|
|
|
|
|
|
|
|
|
Total ICS
Revenues
|
$
1,161.4
|
|
$
1,097.1
|
|
6%
|
|
$
2,908.2
|
|
$
2,618.6
|
|
11%
|
|
|
|
|
|
|
|
|
|
|
|
|
Global Technology
and Operations
|
|
|
|
|
|
|
|
|
|
|
|
Capital
markets
|
$
247.2
|
|
$
158.6
|
|
56%
|
|
$
680.7
|
|
$
473.3
|
|
44%
|
Wealth and investment
management
|
134.3
|
|
137.5
|
|
(2%)
|
|
412.0
|
|
388.5
|
|
6%
|
Total GTO Recurring fee revenues
|
381.5
|
|
296.1
|
|
29%
|
|
1,092.6
|
|
861.8
|
|
27%
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
exchange
|
(9.1)
|
|
(3.4)
|
|
168%
|
|
(14.6)
|
|
(18.3)
|
|
(20%)
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Revenues
|
$
1,533.7
|
|
$
1,389.8
|
|
10%
|
|
$
3,986.2
|
|
$
3,462.1
|
|
15%
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues by
Type
|
|
|
|
|
|
|
|
|
|
|
|
Recurring fee
revenues
|
$
1,011.7
|
|
$
873.0
|
|
16%
|
|
$
2,560.2
|
|
$
2,195.2
|
|
17%
|
Event-driven fee
revenues
|
58.7
|
|
73.1
|
|
(20%)
|
|
199.8
|
|
163.2
|
|
22%
|
Distribution
revenues
|
472.4
|
|
447.0
|
|
6%
|
|
1,240.9
|
|
1,122.0
|
|
11%
|
Foreign currency
exchange
|
(9.1)
|
|
(3.4)
|
|
168%
|
|
(14.6)
|
|
(18.3)
|
|
(20%)
|
Total Revenues
|
$
1,533.7
|
|
$
1,389.8
|
|
10%
|
|
$
3,986.2
|
|
$
3,462.1
|
|
15%
|
|
Amounts may not
sum due to rounding.
|
Select Operating
Metrics (Unaudited)
|
|
|
Three Months
Ended
March 31,
|
|
|
|
Nine Months
Ended
March 31,
|
|
|
In
millions
|
2022
|
|
2021
|
|
%
Change
|
|
2022
|
|
2021
|
|
%
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
Closed
sales1
|
$57.5
|
|
$43.3
|
|
33%
|
|
$170.1
|
|
$119.4
|
|
42%
|
|
|
|
|
|
|
|
|
|
|
|
|
Record
Growth2
|
|
|
|
|
|
|
|
|
|
|
|
Equity
proxy
|
17%
|
|
20%
|
|
|
|
21%
|
|
20%
|
|
|
Mutual fund
interims
|
10%
|
|
7%
|
|
|
|
15%
|
|
9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Internal Trade
Growth3
|
(6)%
|
|
12%
|
|
|
|
(1)%
|
|
16%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
March
31,
|
|
Nine Months
Ended
March
31,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Reconciliation of
Adjusted Operating Income
|
|
Operating income
(GAAP)
|
$
246.0
|
|
$
239.2
|
|
$
418.2
|
|
$
397.3
|
Adjustments:
|
|
|
|
|
|
|
|
Amortization of
Acquired Intangibles and Purchased
Intellectual Property
|
60.8
|
|
31.9
|
|
192.0
|
|
96.8
|
Acquisition and
Integration Costs
|
3.1
|
|
9.2
|
|
13.8
|
|
11.6
|
Real Estate
Realignment and Covid-19 Related Expenses (a)
|
3.3
|
|
3.3
|
|
6.8
|
|
41.1
|
Software
Charge
|
—
|
|
—
|
|
—
|
|
6.0
|
Adjusted Operating
income (Non-GAAP)
|
$
313.3
|
|
$
283.6
|
|
$
630.8
|
|
$
552.7
|
Operating income
margin (GAAP)
|
16.0%
|
|
17.2%
|
|
10.5%
|
|
11.5%
|
Adjusted Operating
income margin (Non-GAAP)
|
20.4%
|
|
20.4%
|
|
15.8%
|
|
16.0%
|
|
|
|
|
|
|
|
|
Reconciliation of
Adjusted Net earnings
|
|
Net earnings
(GAAP)
|
$
176.6
|
|
$
165.0
|
|
$
291.0
|
|
$
287.1
|
Adjustments:
|
|
|
|
|
|
|
|
Amortization of
Acquired Intangibles and Purchased
Intellectual Property
|
60.8
|
|
31.9
|
|
192.0
|
|
96.8
|
Acquisition and
Integration Costs
|
3.1
|
|
9.2
|
|
13.8
|
|
11.6
|
Real Estate
Realignment and Covid-19 Related Expenses (a)
|
3.3
|
|
3.3
|
|
6.8
|
|
41.1
|
Investment
Gains
|
—
|
|
—
|
|
(7.5)
|
|
(8.7)
|
Software
Charge
|
—
|
|
—
|
|
—
|
|
6.0
|
Loss on
Acquisition Related Financial Instrument
|
—
|
|
9.6
|
|
—
|
|
9.6
|
Subtotal of
adjustments
|
67.2
|
|
54.0
|
|
205.1
|
|
156.3
|
Tax impact of
adjustments (c)
|
(15.4)
|
|
(10.9)
|
|
(44.1)
|
|
(35.0)
|
Adjusted Net earnings
(Non-GAAP)
|
$
228.4
|
|
$
208.1
|
|
$
452.0
|
|
$
408.4
|
|
|
|
|
|
|
|
|
Reconciliation of
Adjusted EPS
|
|
|
|
|
|
|
|
Diluted earnings per
share (GAAP)
|
$
1.49
|
|
$
1.40
|
|
$
2.46
|
|
$
2.44
|
Adjustments:
|
|
|
|
|
|
|
|
Amortization of
Acquired Intangibles and Purchased
Intellectual Property
|
0.51
|
|
0.27
|
|
1.62
|
|
0.82
|
Acquisition and
Integration Costs
|
0.03
|
|
0.08
|
|
0.12
|
|
0.10
|
Real Estate
Realignment and Covid-19 Related Expenses (b)
|
0.03
|
|
0.03
|
|
0.06
|
|
0.35
|
Investment
Gains
|
—
|
|
—
|
|
(0.06)
|
|
(0.07)
|
Software
Charge
|
—
|
|
—
|
|
—
|
|
0.05
|
Loss on
Acquisition Related Financial Instrument
|
—
|
|
0.08
|
|
—
|
|
0.08
|
Subtotal of
adjustments
|
0.57
|
|
0.46
|
|
1.73
|
|
1.33
|
Tax impact of
adjustments (c)
|
(0.13)
|
|
(0.09)
|
|
(0.37)
|
|
(0.30)
|
Adjusted earnings per
share (Non-GAAP)
|
$
1.93
|
|
$
1.76
|
|
$
3.81
|
|
$
3.47
|
|
(a) Real Estate
Realignment Expenses were $0.7 million and $1.2 million for the
three months ended March 31, 2022 and 2021, respectively, and $0.5
million and $33.0 million for the nine months ended March 31, 2022
and 2021, respectively. Covid-19 Related Expenses were $2.6 million
and $2.1 million for the three months ended March 31, 2022 and
2021, respectively, and $6.3 million and $8.1 million for the nine
months ended March 31, 2022 and 2021, respectively.
|
|
(b) Real Estate
Realignment Expenses impacted Adjusted earnings per share by $0.01
and $0.01 for the three months ended March 31, 2022 and 2021,
respectively, and less than $0.01 and $0.28 for the nine months
ended March 31, 2022 and 2021, respectively. Covid-19 Related
Expenses impacted Adjusted earnings per share by $0.02 and $0.02
for the three months ended March 31, 2022 and 2021, respectively,
and $0.05 and $0.07 for the nine months ended March 31, 2022 and
2021, respectively.
|
|
(c) Calculated using
the GAAP effective tax rate, adjusted to exclude $2.2 million
and $13.6 million of excess tax benefits associated with
stock-based compensation for the three and nine months ended March
31, 2022, respectively, and $1.7 million and $14.6 million of
excess tax benefits associated with stock-based compensation for
the three and nine months ended March 31, 2021, respectively. 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,
|
|
2022
|
|
2021
|
Reconciliation of
Free Cash Flow
|
|
Net cash flows
provided by (used in) operating activities (GAAP)
|
$
(13.9)
|
|
$
189.5
|
Capital expenditures
and Software purchases and capitalized internal use
software
|
(54.4)
|
|
(71.2)
|
Proceeds from asset
sales
|
—
|
|
18.0
|
Free cash flow
(Non-GAAP)
|
$
(68.4)
|
|
$
136.3
|
|
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
|
|
(2) - 2%
growth
|
Adjusted earnings per
share - Non-GAAP
|
|
13 - 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 $1.80 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-third-quarter-fiscal-2022-results-301537925.html
SOURCE Broadridge Financial Solutions, Inc.