Fiscal Year 2022 Recurring Revenue Growth of
16%
Fiscal Year 2022 Diluted EPS was $4.55 and Adjusted EPS grew 14% to $6.46
Record Closed Sales of $282 million
Raising Annual Dividend 13% to $2.90 Per Share
Fiscal Year 2023 Guidance of 6-9% Recurring
Revenue Growth and 7-11% Adjusted EPS Growth
NEW
YORK, Aug. 12, 2022 /PRNewswire/ -- Broadridge
Financial Solutions, Inc. (NYSE: BR) today reported financial
results for the fourth quarter and fiscal year 2022. Results
compared with the same period last year were as follows:
Summary Financial
Results
|
|
Fourth
Quarter
|
|
Fiscal
Year
|
|
Dollars in millions,
except per share data
|
|
2022
|
2021
|
Change
|
2022
|
2021
|
Change
|
|
|
|
|
|
|
|
|
|
Recurring fee
revenues
|
|
$1,189
|
$1,033
|
15 %
|
$3,749
|
$3,228
|
16 %
|
Total
revenues
|
|
$1,723
|
$1,532
|
12 %
|
$5,709
|
$4,994
|
14 %
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
342
|
281
|
21 %
|
760
|
679
|
12 %
|
|
Margin
|
|
19.8 %
|
18.4 %
|
|
13.3 %
|
13.6 %
|
|
|
|
|
|
|
|
|
|
|
Adjusted Operating
income - Non-GAAP
|
|
436
|
349
|
25 %
|
1,066
|
902
|
18 %
|
|
Margin
|
|
25.3 %
|
22.8 %
|
|
18.7 %
|
18.1 %
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS
|
|
$2.09
|
$2.20
|
(5 %)
|
$4.55
|
$4.65
|
(2 %)
|
Adjusted EPS -
Non-GAAP
|
|
$2.65
|
$2.19
|
21 %
|
$6.46
|
$5.66
|
14 %
|
|
|
|
|
|
|
|
|
|
Closed sales
|
|
$112
|
$113
|
(1 %)
|
$282
|
$232
|
21 %
|
"A strong fourth quarter capped another great year for
Broadridge, with record closed sales, 16% recurring revenue growth,
continued margin expansion, and 14% Adjusted EPS growth," said
Tim Gokey, Broadridge's CEO. "Our
results reflect continued execution of our long-term growth
strategy, the ongoing digitization of financial services, and
strong performance from our Itiviti acquisition.
"Broadridge's resilient business model is built to deliver
growth through different economic cycles. Looking ahead, we expect
continued growth in Fiscal 2023, with 6-9% organic recurring
revenue growth, continued margin expansion, and 7-11% Adjusted EPS
growth. Most importantly, we are well-positioned to deliver, again,
on our three-year financial objectives, with recurring revenue and
Adjusted EPS growth at or above the higher end of the range," Mr.
Gokey added.
"Finally, I'm pleased to announce that our Board has approved a
13% increase in our annual dividend amount to $2.90 per share. Broadridge has now increased its
dividend for 16 consecutive years, further underlining the strength
and resiliency of our business and the durability of the trends
driving our growth."
Fiscal Year 2023
Financial Guidance
|
|
Recurring revenue
growth
|
|
6 - 9%
|
Adjusted Operating
income margin - Non-GAAP
|
|
Increase of ~ 50
bps
|
Adjusted earnings per
share growth - Non-GAAP
|
|
7 - 11%
|
Closed sales
|
|
$270 - 310M
|
Financial Results for Fourth Quarter Fiscal Year 2022
compared to Fourth Quarter Fiscal Year 2021
- Total revenues increased 12% to $1,723 million from $1,532 million in the prior year period.
-
- Recurring fee revenues increased 15% to $1,189 million from $1,033
million. The increase was primarily driven by 4pts of net
new business and 8pts of internal growth. Internal growth was
primarily driven by Investor Communication Solutions ("ICS").
Acquisitions also contributed 3pts of growth, primarily from the
acquisition of Itiviti Holding AB ("Itiviti").
- Event-driven fee revenues decreased by $2 million, or 3%, to $70
million, as an increase in mutual fund proxy was more than
offset by lower equity contest activity.
- Distribution revenues increased $49
million, or 12%, to $477
million, driven equally by higher customer communications
mail volumes and higher postage rates.
- Operating income was $342
million, an increase of $60
million, or 21%. Operating income margin increased to 19.8%,
compared to 18.4% for the prior year period due to higher Recurring
fee revenues, partially offset by distribution and other
revenue-related expenses, including higher amortization expense
from acquired intangible assets.
-
- Adjusted Operating income was $436
million, an increase of $87
million, or 25%. The increase was driven by higher recurring
fee revenues partially offset by higher distribution and other
revenue-related expenses. Adjusted Operating income margin
increased to 25.3%, compared to 22.8% for the prior year
period.
- Interest expense, net was $21
million, an increase of $3
million, or 16%, driven by higher average debt
outstanding.
- The effective tax rate was 22.1% compared to
22.6% in the prior year period. The decrease was driven by the
increased impact of discrete tax items.
- Net earnings decreased 5% to $248 million and Adjusted Net earnings increased
21% to $314 million.
-
- Diluted earnings per share decreased 5% to $2.09 and Adjusted earnings per share increased
21% to $2.65.
Segment and Other Results for Fourth Quarter Fiscal Year 2022
compared to Fourth Quarter Fiscal Year 2021
Investor Communication Solutions
- ICS total revenues were $1,354
million, an increase of $146
million, or 12%.
-
- Recurring fee revenues increased $99
million, or 14%, to $807
million. The increase was attributable to 4pts of revenue
from net new business and 10pts of revenue from internal growth.
Internal growth was driven by higher volumes including equity proxy
record growth of 17% and mutual fund interims record growth of 10%,
as well as higher customer communication volumes.
- Event-driven fee revenues decreased $2
million, or 3%, to $70
million, primarily as the increase in mutual fund proxy was
more than offset by lower equity contest activity.
- Distribution revenues increased $49
million, or 12%, to $477
million driven equally by higher customer communications
mail volumes and higher postage rates.
- ICS earnings before income taxes were $364 million, an increase of $77 million, or 27%, driven by higher recurring
fee revenues. Segment operating expenses rose 7%, or $69 million, to $990
million, primarily driven by distribution and other
revenue-related expenses. Amortization expense from acquired
intangibles decreased by $5 million
to $16 million. Pre-tax margins
increased to 26.9% from 23.8%.
Global Technology and Operations ("GTO")
- GTO Recurring fee revenues were $382
million, an increase of $57
million, or 18%, driven by 9pts of growth from acquisitions,
primarily Itiviti, as well as 5pts of net new business from
onboarding of new clients, and a 4pt increase in internal
growth.
- GTO Earnings before income taxes were $37 million, an increase of $10 million, or 39%, compared to $26 million in the prior year period. The
earnings increase was driven by higher organic recurring revenue
growth which was modestly offset by a higher loss primarily from
the acquisition of Itiviti. Amortization expense from acquired
intangibles increased by $11 million
to $46 million in the fourth quarter
of fiscal year 2022, primarily as a result of the Itiviti
acquisition. Pre-tax margins increased by 1.5 percentage points to
9.6%.
Other
- Other Loss before income tax was $83
million compared to Other Income before income tax of
$24 million in the prior year period.
The decrease was primarily due to the absence of the $72 million non-operating Gain on
Acquisition-Related Financial Instrument in the fourth quarter of
fiscal year 2021 and a $19 million
increase in costs associated with the Company's Real Estate
Realignment and Covid-19 Related Expenses driven primarily by the
reduction in our office footprint in the current year period.
Financial Results for Fiscal Year 2022 compared to Fiscal
Year 2021
- Total revenues increased 14% to $5,709 million from $4,994
million in the prior year period.
-
- Recurring fee revenues increased 16% to $3,749 million from $3,228
million. The increase was attributable to 4pts of growth
from net new business, 5pts of internal growth, and 7pts related to
the impact of acquisitions. Internal growth was driven by higher
volumes in our ICS business from equity proxy Record Growth of 18%
and mutual fund interims Record Growth of 14%. Growth from
acquisitions was 7pts, most notably from our Itiviti acquisition
which closed in May 2021.
- Event-driven fee revenues increased $34
million, or 14%, to $270
million, primarily due to increased volume of mutual fund
proxy activity.
- Distribution revenues increased $168
million, or 11%, to $1,718
million, primarily driven by higher customer communications
mail volumes and higher postage rates.
- Operating income was $760
million, an increase of $81
million, or 12%. Operating income margin decreased to 13.3%
from 13.6% in the prior year period.
-
- Adjusted Operating income was $1,066
million, an increase of $165
million, or 18%. The increase was due to the impact of
higher Recurring fee revenues and higher Event-driven fee
revenues.
- Adjusted Operating income margin increased to 18.7%, compared
to 18.1% for the prior year period. An increase in pass through
distribution revenues negatively impacted margins by approximately
70 basis points.
- Interest expense, net was $85
million, an increase of $29
million, from an increase in debt outstanding related to the
acquisition of Itiviti.
- The effective tax rate was 19.8% compared to 21.4%
in the prior year period. The decrease in the effective tax rate
was driven by higher total discrete tax items, in addition to the
excess tax benefits related to equity compensation, compared to the
prior year period.
- Net earnings decreased 2% to $539 million and Adjusted Net earnings increased
15% to $766 million.
-
- Diluted earnings per share decreased 2% to $4.55 and Adjusted earnings per share increased
14% to $6.46.
- The increase in Adjusted earnings per share was primarily due
to the increase in Recurring fee revenues and higher Event-driven
fee revenues.
Segment and Other Results for Fiscal Year 2022 compared to
Fiscal Year 2021
ICS
- ICS total revenues were $4,262
million, an increase of $435
million, or 11%.
-
- Recurring fee revenues increased $233
million, or 11%, to $2,275
million. The increase was attributable to 5pts of revenue
from net new business and 7pts of revenue from internal growth.
Internal growth was driven by higher volumes including equity proxy
Record Growth of 18% and mutual fund interims Record Growth of
14%.
- Event-driven fee revenues increased $34
million, or 14%, to $270
million, primarily due to increased volume of mutual fund
proxy activity.
- Distribution revenues increased $168
million, or 11%, to $1,718
million, primarily driven by higher customer communications
mail volumes, and higher postage rates.
- ICS earnings before income taxes were $726 million, an increase of $130 million, or 22%, primarily due to the
increase in Recurring fee revenues and Event-driven fee revenues.
Segment operating expenses rose 9%, or $305
million, to $3,536 million,
primarily driven by distribution and other revenue-related
expenses. Amortization expense from acquired intangibles decreased
by $18 million to $69 million from $87
million in the prior period. Pre-tax margins increased to
17.0% from 15.6%.
GTO
- GTO Recurring fee revenues were $1,474
million, an increase of $288
million, or 24%, driven by 19pts of growth from
acquisitions, primarily Itiviti, as well as 4pts of net new
business from onboarding of new clients.
- GTO earnings before income taxes were $140 million, a decrease of $61 million, or 30%, compared to $200 million in the prior year period. The
earnings decrease was due to $291
million in operating costs from acquisitions, primarily as a
result of the Itiviti acquisition, as compared to revenue from
acquisitions of $228 million.
Amortization expense from acquired intangibles increased by
$122 million to $189 million in fiscal year 2022 from
$68 million in the prior year
period. Pre-tax margins decreased to 9.5% from 16.9%.
Other
- Other Loss before income tax increased 110% to $189 million from $90
million in the prior year period. The increased loss before
income taxes was primarily due to the absence of the non-operating
Gain on Acquisition-Related Financial Instrument of $62 million in the prior year period and higher
interest expense of $29 million due
to an increase in average debt outstanding related to the fiscal
2021 acquisition of Itiviti.
Dividend Declaration and Increase
On August 11, 2022, Broadridge's
Board of Directors ("the Board") declared a quarterly dividend of
$0.725 per share payable on
October 5, 2022 to stockholders of
record on September 15,
2022. This declaration reflects the Board's approval of an
increase in the annual dividend amount by 13% from $2.56 to $2.90 per
share, subject to the discretion of the Board to declare quarterly
dividends. With this increase, the Company's annual dividend
has increased for the 16th consecutive year since becoming a public
company in 2007.
Earnings Conference Call
An analyst conference call will be held today, August 12, 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 August 19,
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 2334448 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, for internal planning and
forecasting purposes and in the calculation of performance-based
compensation. In addition, and as a consequence of the importance
of these Non-GAAP financial measures in managing our business, the
Company's Compensation Committee of the Board of Directors
incorporates Non-GAAP financial measures in the evaluation process
for determining management compensation.
Adjusted Operating Income, Adjusted Operating Income Margin,
Adjusted Net Earnings and Adjusted Earnings Per Share
These Non-GAAP measures reflect Operating income, Operating
income margin, Net earnings, and Diluted earnings per share, as
adjusted to exclude the impact of certain costs, expenses, gains
and losses and other specified items the exclusion of which
management believes provide insight regarding our ongoing operating
performance. Depending on the period presented, these adjusted
measures exclude the impact 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) Russia-Related Exit
Costs, (v) Investment Gains, (vi) Software Charge, and (vii) Gain
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. Russia-Related Exit
Costs are direct and incremental costs associated with the
Company's wind down of business activities in Russia in response to Russia's invasion of Ukraine, including relocation-related expenses
of impacted associates. 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. Gain
on Acquisition-Related Financial Instrument represents a
non-operating gain on a financial instrument designed to minimize
the Company's foreign exchange risk associated with the acquisition
of Itiviti, as well as certain other non-operating financing costs
associated with the Itiviti Acquisition.
We exclude Acquisition and Integration Costs, Real Estate
Realignment and Covid-19 Related Expenses, Russia-Related Exit
Costs, Investment Gains, the Software Charge and the Gain 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 2023 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, 2022 (the "2022 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 2022 Annual
Report.
These risks include:
- changes in laws and regulations affecting Broadridge's clients
or the services provided by Broadridge;
- 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;
- 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;
- 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;
- the success of Broadridge in retaining and selling additional
services to its existing clients and in obtaining new clients;
- Broadridge's failure to keep pace with changes in technology
and the demands of its clients;
- competitive conditions;
- Broadridge's ability to attract and retain key personnel;
and
- the impact of new acquisitions and divestitures.
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 $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
June
30,
|
|
Fiscal Year
Ended
June
30,
|
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Revenues
|
|
|
$ 1,722.9
|
|
$ 1,531.6
|
|
$
5,709.1
|
|
$
4,993.7
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
|
|
1,146.8
|
|
1,016.7
|
|
4,116.9
|
|
3,570.8
|
Selling, general and
administrative expenses
|
|
|
234.3
|
|
233.5
|
|
832.3
|
|
744.3
|
Total operating
expenses
|
|
|
1,381.2
|
|
1,250.2
|
|
4,949.2
|
|
4,315.0
|
Operating
income
|
|
|
341.7
|
|
281.4
|
|
759.9
|
|
678.7
|
Interest expense,
net
|
|
|
(20.7)
|
|
(17.9)
|
|
(84.7)
|
|
(55.2)
|
Other non-operating
income (expenses), net
|
|
|
(2.2)
|
|
72.8
|
|
(3.0)
|
|
72.7
|
Earnings before income
taxes
|
|
|
318.8
|
|
336.4
|
|
672.2
|
|
696.2
|
Provision for income
taxes
|
|
|
70.6
|
|
75.9
|
|
133.1
|
|
148.7
|
Net earnings
|
|
|
$
248.1
|
|
$
260.4
|
|
$ 539.1
|
|
$ 547.5
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share
|
|
|
$
2.12
|
|
$
2.24
|
|
$
4.62
|
|
$
4.73
|
Diluted earnings per
share
|
|
|
$
2.09
|
|
$
2.20
|
|
$
4.55
|
|
$
4.65
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares
outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
117.2
|
|
116.1
|
|
116.7
|
|
115.7
|
Diluted
|
|
|
118.5
|
|
118.1
|
|
118.5
|
|
117.8
|
|
|
|
|
|
|
|
|
|
|
Amounts may not sum
due to rounding.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed
Consolidated Balance Sheets
|
(Unaudited)
|
|
In millions, except
per share amounts
|
|
|
June 30,
2022
|
|
June 30,
2021
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
$
224.7
|
|
$
274.5
|
Accounts receivable,
net of allowance for doubtful accounts
of $6.8 and $9.3, respectively
|
|
|
946.9
|
|
820.3
|
Other current
assets
|
|
|
156.8
|
|
166.4
|
Total current
assets
|
|
|
1,328.4
|
|
1,261.3
|
Property, plant and
equipment, net
|
|
|
150.9
|
|
177.2
|
Goodwill
|
|
|
3,484.9
|
|
3,720.1
|
Intangible assets,
net
|
|
|
1,077.1
|
|
1,425.0
|
Deferred client
conversion and start-up costs
|
|
|
1,232.3
|
|
773.7
|
Other non-current
assets
|
|
|
895.3
|
|
762.5
|
Total
assets
|
|
|
$
8,168.8
|
|
$
8,119.8
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Payables and accrued
expenses
|
|
|
$
1,114.9
|
|
$
1,102.7
|
Contract
liabilities
|
|
|
198.5
|
|
185.3
|
Total current
liabilities
|
|
|
1,313.4
|
|
1,288.0
|
Long-term
debt
|
|
|
3,793.0
|
|
3,887.6
|
Deferred
taxes
|
|
|
446.1
|
|
400.7
|
Contract
liabilities
|
|
|
215.8
|
|
197.2
|
Other non-current
liabilities
|
|
|
481.5
|
|
537.2
|
Total
liabilities
|
|
|
6,249.8
|
|
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,
117.3 and 116.1 shares, respectively
|
|
|
1.6
|
|
1.6
|
Additional paid-in
capital
|
|
|
1,344.7
|
|
1,245.5
|
Retained
earnings
|
|
|
2,824.0
|
|
2,583.8
|
Treasury stock, at
cost: 37.2 and 38.3 shares, respectively
|
|
|
(2,024.8)
|
|
(2,030.9)
|
Accumulated other
comprehensive income (loss)
|
|
|
(226.3)
|
|
9.2
|
Total stockholders'
equity
|
|
|
1,919.1
|
|
1,809.1
|
Total liabilities and
stockholders' equity
|
|
|
$
8,168.8
|
|
$
8,119.8
|
|
|
|
|
|
|
Amounts may not sum
due to rounding.
|
Condensed
Consolidated Statements of Cash Flows
|
(Unaudited)
|
|
In
millions
|
Fiscal
Year
|
|
2022
|
|
2021
|
Cash Flows From
Operating Activities
|
|
|
|
Net earnings
|
$
539.1
|
|
$
547.5
|
Adjustments to
reconcile net earnings to net cash flows provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
82.4
|
|
67.4
|
Amortization of
acquired intangibles and purchased intellectual property
|
250.2
|
|
153.7
|
Amortization of other
assets
|
131.4
|
|
113.6
|
Write-down of
long-lived assets
|
39.5
|
|
31.4
|
Stock-based
compensation expense
|
68.4
|
|
58.6
|
Deferred income
taxes
|
50.7
|
|
52.0
|
Gain on forward
foreign exchange derivative
|
—
|
|
(66.7)
|
Other
|
(17.9)
|
|
(31.7)
|
Changes in operating
assets and liabilities, net of assets and liabilities
acquired:
|
|
|
|
Current assets and
liabilities:
|
|
|
|
Increase in Accounts
receivable, net
|
(85.4)
|
|
(42.4)
|
(Increase) decrease in
Other current assets
|
12.2
|
|
(29.6)
|
Increase (decrease) in
Payables and accrued expenses
|
(26.7)
|
|
144.3
|
Increase in Contract
liabilities
|
30.2
|
|
12.4
|
Non-current assets and
liabilities:
|
|
|
|
Increase in Other
non-current assets
|
(696.9)
|
|
(454.5)
|
Increase in Other
non-current liabilities
|
66.2
|
|
84.0
|
Net cash flows provided
by operating activities
|
443.5
|
|
640.1
|
Cash Flows From
Investing Activities
|
|
|
|
Capital
expenditures
|
(29.0)
|
|
(51.9)
|
Software purchases and
capitalized internal use software
|
(44.1)
|
|
(48.8)
|
Proceeds from asset
sales
|
—
|
|
18.0
|
Acquisitions, net of
cash acquired
|
(13.3)
|
|
(2,603.6)
|
Settlement of forward
foreign exchange derivative
|
—
|
|
66.7
|
Other investing
activities
|
(24.0)
|
|
(34.0)
|
Net cash flows used in
investing activities
|
(110.4)
|
|
(2,653.7)
|
Cash Flows From
Financing Activities
|
|
|
|
Debt
proceeds
|
670.0
|
|
4,325.0
|
Debt
repayments
|
(765.5)
|
|
(2,230.7)
|
Dividends
paid
|
(290.7)
|
|
(261.7)
|
Purchases of Treasury
stock
|
(22.8)
|
|
(21.5)
|
Proceeds from exercise
of stock options
|
60.2
|
|
35.3
|
Other financing
activities
|
(22.0)
|
|
(48.6)
|
Net cash flows provided
by (used in) financing activities
|
(370.8)
|
|
1,797.8
|
Effect of exchange rate
changes on Cash and cash equivalents
|
(12.2)
|
|
13.8
|
Net change in Cash and
cash equivalents
|
(49.9)
|
|
(202.1)
|
Cash and cash
equivalents, beginning of fiscal year
|
274.5
|
|
476.6
|
Cash and cash
equivalents, end of fiscal year
|
$
224.7
|
|
$
274.5
|
|
|
|
|
Amounts may not sum
due to rounding
|
Segment
Results
|
(Unaudited)
|
|
|
In
millions
|
Three Months
Ended
June
30,
|
|
Fiscal Year
Ended
June
30,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Revenues
|
|
|
|
|
|
Investor Communication
Solutions
|
$ 1,354.0
|
|
$ 1,208.4
|
|
$
4,262.1
|
|
$
3,827.0
|
Global Technology and
Operations
|
381.7
|
|
324.4
|
|
1,474.4
|
|
1,186.2
|
Foreign currency
exchange
|
(12.8)
|
|
(1.2)
|
|
(27.4)
|
|
(19.5)
|
Total
|
$ 1,722.9
|
|
$ 1,531.6
|
|
$
5,709.1
|
|
$
4,993.7
|
|
|
|
|
|
|
Earnings Before
Income Taxes
|
|
|
|
|
|
Investor Communication
Solutions
|
$
364.4
|
|
$
287.5
|
|
$ 726.3
|
|
$ 596.0
|
Global Technology and
Operations
|
36.7
|
|
26.4
|
|
139.5
|
|
200.3
|
Other
|
(83.2)
|
|
24.2
|
|
(188.9)
|
|
(90.1)
|
Foreign currency
exchange
|
0.9
|
|
(1.8)
|
|
(4.7)
|
|
(10.1)
|
Total
|
$
318.8
|
|
$
336.4
|
|
$ 672.2
|
|
$ 696.2
|
|
|
|
|
|
|
|
|
Pre-tax
margins:
|
|
|
|
|
|
|
|
Investor Communication
Solutions
|
26.9 %
|
|
23.8 %
|
|
17.0 %
|
|
15.6 %
|
Global Technology and
Operations
|
9.6 %
|
|
8.1 %
|
|
9.5 %
|
|
16.9 %
|
|
Amortization of
acquired intangibles and purchased intellectual
property
|
Investor Communication
Solutions
|
$
16.0
|
|
$
21.2
|
|
$
69.3
|
|
$
86.8
|
Global Technology and
Operations
|
46.1
|
|
35.5
|
|
189.3
|
|
67.6
|
Other
|
—
|
|
0.4
|
|
—
|
|
1.5
|
Foreign currency
exchange
|
(3.9)
|
|
(0.3)
|
|
(8.4)
|
|
(2.3)
|
Total
|
$
58.2
|
|
$
56.8
|
|
$
250.2
|
|
$
153.7
|
|
|
|
|
|
|
|
|
Amounts may not sum
due to rounding.
|
Supplemental
Reporting Detail - Additional Product Line
Reporting
|
(Unaudited)
|
|
In
millions
|
Three Months
Ended
June
30,
|
|
Fiscal Year
Ended
June
30,
|
|
2022
|
|
2021
|
|
Change
|
|
2022
|
|
2021
|
|
Change
|
Investor
Communication Solutions
|
|
|
|
|
|
|
|
|
|
|
|
Regulatory
|
$
423.9
|
|
$
375.4
|
|
13 %
|
|
$
1,077.4
|
|
$
940.2
|
|
15 %
|
Data-driven fund
solutions
|
102.9
|
|
92.8
|
|
11 %
|
|
365.8
|
|
343.8
|
|
6 %
|
Issuer
|
125.4
|
|
106.0
|
|
18 %
|
|
215.9
|
|
188.6
|
|
14 %
|
Customer
communications
|
155.2
|
|
134.5
|
|
15 %
|
|
615.8
|
|
569.5
|
|
8 %
|
Total ICS Recurring fee revenues
|
807.4
|
|
708.7
|
|
14 %
|
|
2,275.0
|
|
2,042.1
|
|
11 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity and
other
|
37.9
|
|
44.6
|
|
(15 %)
|
|
115.1
|
|
123.3
|
|
(7 %)
|
Mutual
funds
|
31.9
|
|
27.6
|
|
16 %
|
|
154.5
|
|
112.2
|
|
38 %
|
Total ICS Event-driven fee revenues
|
69.8
|
|
72.3
|
|
(3 %)
|
|
269.6
|
|
235.5
|
|
14 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Distribution
revenues
|
476.7
|
|
427.5
|
|
12 %
|
|
1,717.6
|
|
1,549.5
|
|
11 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Total ICS
Revenues
|
$
1,354.0
|
|
$
1,208.4
|
|
12 %
|
|
$
4,262.1
|
|
$
3,827.0
|
|
11 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Global Technology
and Operations
|
|
|
|
|
|
|
|
|
|
|
|
Capital
markets
|
$
240.1
|
|
$
188.0
|
|
28 %
|
|
$
920.8
|
|
$
661.3
|
|
39 %
|
Wealth and investment
management
|
141.6
|
|
136.3
|
|
4 %
|
|
553.6
|
|
524.9
|
|
5 %
|
Total GTO Recurring fee revenues
|
381.7
|
|
324.4
|
|
18 %
|
|
1,474.4
|
|
1,186.2
|
|
24 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
exchange
|
(12.8)
|
|
(1.2)
|
|
NM
|
|
(27.4)
|
|
(19.5)
|
|
41 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Revenues
|
$
1,722.9
|
|
$
1,531.6
|
|
12 %
|
|
$
5,709.1
|
|
$
4,993.7
|
|
14 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues by
Type
|
|
|
|
|
|
|
|
|
|
|
|
Recurring fee
revenues
|
$
1,189.2
|
|
$
1,033.0
|
|
15 %
|
|
$
3,749.3
|
|
$
3,228.3
|
|
16 %
|
Event-driven fee
revenues
|
69.8
|
|
72.3
|
|
(3 %)
|
|
269.6
|
|
235.5
|
|
14 %
|
Distribution
revenues
|
476.7
|
|
427.5
|
|
12 %
|
|
1,717.6
|
|
1,549.5
|
|
11 %
|
Foreign currency
exchange
|
(12.8)
|
|
(1.2)
|
|
NM
|
|
(27.4)
|
|
(19.5)
|
|
41 %
|
Total Revenues
|
$
1,722.9
|
|
$
1,531.6
|
|
12 %
|
|
$
5,709.1
|
|
$
4,993.7
|
|
14 %
|
|
NM - not
meaningful
|
|
Amounts may not sum
due to rounding.
|
Select Operating
Metrics
|
(Unaudited)
|
|
|
Three Months
Ended
June
30,
|
|
|
|
Fiscal Year
Ended
June 30,
|
|
|
In
millions
|
2022
|
|
2021
|
|
Change
|
|
2022
|
|
2021
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
Closed
sales1
|
$111.9
|
|
$112.7
|
|
(1) %
|
|
$281.9
|
|
$232.1
|
|
21 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Record
Growth2
|
|
|
|
|
|
|
|
|
|
|
|
Equity
proxy
|
17 %
|
|
33 %
|
|
|
|
18 %
|
|
26 %
|
|
|
Mutual fund
interims
|
10 %
|
|
11 %
|
|
|
|
14 %
|
|
10 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Internal Trade
Growth3
|
8 %
|
|
(1) %
|
|
|
|
1 %
|
|
12 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts may not sum
due to rounding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1Refer to
the "Management's Discussion and Analysis of Financial Condition
and Results of Operations" section of Broadridge's 2022 Annual
Report 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.
|
|
|
|
|
|
|
|
|
|
|
|
|
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
June
30,
|
|
Fiscal Year
Ended
June
30,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Reconciliation of
Adjusted Operating Income
|
|
Operating income
(GAAP)
|
$
341.7
|
|
$
281.4
|
|
$
759.9
|
|
$
678.7
|
Adjustments:
|
|
|
|
|
|
|
|
Amortization of
Acquired Intangibles and Purchased Intellectual Property
|
58.2
|
|
56.8
|
|
250.2
|
|
153.7
|
Acquisition and
Integration Costs
|
10.6
|
|
6.5
|
|
24.5
|
|
18.1
|
Real Estate
Realignment and Covid-19 Related Expenses (a)
|
23.7
|
|
4.2
|
|
30.5
|
|
45.3
|
Russia-Related Exit
Costs
|
1.4
|
|
—
|
|
1.4
|
|
—
|
Software
Charge
|
—
|
|
—
|
|
—
|
|
6.0
|
Adjusted Operating
income (Non-GAAP)
|
$
435.6
|
|
$
349.1
|
|
$ 1,066.4
|
|
$
901.8
|
Operating income margin
(GAAP)
|
19.8 %
|
|
18.4 %
|
|
13.3 %
|
|
13.6 %
|
Adjusted Operating
income margin (Non-GAAP)
|
25.3 %
|
|
22.8 %
|
|
18.7 %
|
|
18.1 %
|
|
|
|
|
|
|
|
|
Reconciliation of
Adjusted Net earnings
|
|
Net earnings
(GAAP)
|
$
248.1
|
|
$
260.4
|
|
$
539.1
|
|
$
547.5
|
Adjustments:
|
|
|
|
|
|
|
|
Amortization of
Acquired Intangibles and Purchased Intellectual Property
|
58.2
|
|
56.8
|
|
250.2
|
|
153.7
|
Acquisition and
Integration Costs
|
10.6
|
|
6.5
|
|
24.5
|
|
18.1
|
Real Estate
Realignment and Covid-19 Related Expenses (a)
|
23.7
|
|
4.2
|
|
30.5
|
|
45.3
|
Russia-Related Exit
Costs
|
1.4
|
|
—
|
|
1.4
|
|
—
|
Software
Charge
|
—
|
|
—
|
|
—
|
|
6.0
|
Investment
Gains
|
(6.7)
|
|
—
|
|
(14.2)
|
|
(8.7)
|
Gain on
Acquisition-Related Financial Instrument
|
—
|
|
(71.7)
|
|
—
|
|
(62.1)
|
Subtotal of
adjustments
|
87.2
|
|
(4.1)
|
|
292.3
|
|
152.2
|
Tax impact of
adjustments (c)
|
(21.6)
|
|
1.8
|
|
(65.7)
|
|
(33.2)
|
Adjusted Net earnings
(Non-GAAP)
|
$
313.7
|
|
$
258.2
|
|
$
765.7
|
|
$
666.5
|
|
|
|
|
|
|
|
|
Amounts may not sum
due to rounding
|
In millions, except
per share amounts
|
Three Months
Ended
June
30,
|
|
Fiscal Year
Ended
June
30,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Reconciliation of
Adjusted EPS
|
|
|
|
|
|
|
|
Diluted earnings per
share (GAAP)
|
$ 2.09
|
|
$ 2.20
|
|
$ 4.55
|
|
$ 4.65
|
Adjustments:
|
|
|
|
|
|
|
|
Amortization of
Acquired Intangibles and Purchased Intellectual Property
|
0.49
|
|
0.48
|
|
2.11
|
|
1.30
|
Acquisition and
Integration Costs
|
0.09
|
|
0.06
|
|
0.21
|
|
0.15
|
Real Estate
Realignment and Covid-19 Related Expenses (b)
|
0.20
|
|
0.04
|
|
0.26
|
|
0.38
|
Russia-Related Exit
Costs
|
0.01
|
|
—
|
|
0.01
|
|
—
|
Software
Charge
|
—
|
|
—
|
|
—
|
|
0.05
|
Investment
Gains
|
(0.06)
|
|
—
|
|
(0.12)
|
|
(0.07)
|
Gain on
Acquisition-Related Financial Instrument
|
—
|
|
(0.61)
|
|
—
|
|
(0.53)
|
Subtotal of
adjustments
|
0.74
|
|
(0.03)
|
|
2.47
|
|
1.29
|
Tax impact of
adjustments (c)
|
(0.18)
|
|
0.02
|
|
(0.55)
|
|
(0.28)
|
Adjusted earnings per
share (Non-GAAP)
|
$ 2.65
|
|
$ 2.19
|
|
$ 6.46
|
|
$ 5.66
|
|
(a) Real Estate
Realignment Expenses were $22.6 million and $(3.3) million for the
three months ended June 30, 2022 and 2021, respectively, and
$23.0
million and $29.6 million for the fiscal year ended June 30, 2022
and 2021, respectively. Covid-19 Related Expenses were $1.1 million
and $7.5 million for
the three months ended June 30, 2022 and 2021, respectively, and
$7.5 million and $15.7 million for the fiscal year ended June 30,
2022 and 2021,
respectively.
|
|
(b) Real Estate
Realignment Expenses impacted Adjusted earnings per share by $0.19
and $(0.03) for the three months ended June 30, 2022 and 2021,
respectively, and $0.19 and $0.25 for the fiscal year ended June
30, 2022 and 2021, respectively. Covid-19 Related Expenses impacted
Adjusted earnings per
share by $0.01 and $0.06 for the three months ended June 30, 2022
and 2021, respectively, and $0.06 and $0.13 for the fiscal year
ended June 30, 2022 and
2021, respectively.
|
|
(c) Calculated using
the GAAP effective tax rate, adjusted to exclude excess tax
benefits associated with stock-based compensation of $4.5 million
and $18.1
million for the three months and fiscal year ended June 30, 2022,
and $2.4 million and $16.9 million for the three months and fiscal
year ended June 30,
2021, respectively. The tax impact of adjustments also excludes
approximately $2.1 million and $10.6 million of Acquisition and
Integration Costs for the
three months and fiscal year ended June 30, 2021, respectively,
which are not tax-deductible. For purposes of calculating the
Adjusted earnings per share,
the same adjustments were made on a per share basis.
|
|
|
|
Fiscal Year
Ended
June
30,
|
|
|
2022
|
|
2021
|
Reconciliation of
Free Cash Flow
|
|
|
Net cash flows provided
by operating activities (GAAP)
|
|
$
443.5
|
|
$
640.1
|
Capital expenditures
and Software purchases and capitalized internal use
software
|
|
(73.1)
|
|
(100.7)
|
Proceeds from asset
sales
|
|
—
|
|
18.0
|
Free cash flow
(Non-GAAP)
|
|
$
370.4
|
|
$
557.3
|
|
|
|
|
|
Amounts may not sum
due to rounding.
|
Fiscal Year 2023
Guidance
|
Reconciliation of
Non-GAAP to GAAP Measures
|
Adjusted Earnings
Per Share Growth and Adjusted Operating Income
Margin
|
(Unaudited)
|
|
FY23 Adjusted Earnings
Per Share Growth Rate (a)
|
|
|
Diluted earnings per
share - GAAP
|
|
~13-17%
growth
|
Adjusted earnings per
share - Non-GAAP
|
|
7 - 11%
growth
|
|
|
|
FY23 Adjusted Operating
Income Margin (b)
|
|
|
Operating income
margin % - GAAP
|
|
Increase of ~ 150
bps
|
Adjusted Operating
income margin % - Non-GAAP
|
|
Increase of ~ 50
bps
|
|
|
|
(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, and
Russia-Related Exit Costs, and is calculated using diluted shares
outstanding. Fiscal year 2023
Non-GAAP Adjusted earnings per share guidance estimates exclude,
net of taxes, approximately $1.73 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
Russia-Related Exit Costs. Fiscal year 2023 Non-GAAP Adjusted
Operating income margin
guidance estimates excludes approximately $266 million.
|
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content:https://www.prnewswire.com/news-releases/broadridge-reports-fourth-quarter-and-fiscal-2022-results-301604818.html
SOURCE Broadridge Financial Solutions, Inc.