Recurring revenues grew 7%; up 9% constant
currency
Diluted EPS was $0.42 and Adjusted EPS was $0.84
Reaffirming Fiscal Year 2023 Guidance
including 6 - 9% Recurring revenue growth
constant currency and 7 - 11% Adjusted EPS growth
NEW
YORK, Nov. 2, 2022 /PRNewswire/ -- Broadridge
Financial Solutions, Inc. (NYSE:BR) today reported financial
results for the first quarter ended September 30, 2022 of its fiscal year 2023.
Results compared with the same period last year were as follows:
Summary Financial
Results
|
|
First
Quarter
|
|
Dollars in millions,
except per share data
|
|
2023
|
2022
|
Change
|
|
|
|
|
|
|
Recurring
revenues
|
|
$806
|
$750
|
7 %
|
Constant currency growth -
Non-GAAP
|
|
|
|
|
9 %
|
Total
revenues
|
|
$1,283
|
$1,193
|
8 %
|
|
|
|
|
|
|
Operating
income
|
|
$88
|
$103
|
(15 %)
|
Margin
|
|
|
6.8 %
|
8.7 %
|
|
|
|
|
|
|
|
Adjusted Operating
income - Non-GAAP
|
|
$150
|
$177
|
(15 %)
|
Margin -
Non-GAAP
|
|
|
11.7 %
|
14.8 %
|
|
|
|
|
|
|
|
Diluted EPS
|
|
$0.42
|
$0.57
|
(26 %)
|
Adjusted EPS -
Non-GAAP
|
|
$0.84
|
$1.07
|
(21 %)
|
|
|
|
|
|
|
Closed sales
|
|
$29
|
$30
|
(2 %)
|
"Broadridge reported another strong quarter, highlighting the
resilience of our business model and the positive long-term trends
driving our growth," said Tim Gokey,
Broadridge's CEO. "Recurring revenues grew 9% constant currency,
powered by new sales, continued strength in investor participation,
and the strong performance of our BTCS business. Adjusted EPS of
$0.84 was modestly ahead of our
expectations in our seasonally small first quarter."
"With a strong start, we are reaffirming our guidance for our
fiscal year ending in June 2023,
including 6 - 9% Recurring revenue growth constant currency and 7 -
11% Adjusted EPS growth. Driven by the critical role we play
powering investing and corporate governance, Broadridge continues
to be well-positioned for resilient growth across economic cycles
and we are on track to deliver at or above the higher end of our
three-year financial objectives."
Fiscal Year 2023
Financial Guidance
|
|
|
|
FY'23
Guidance
|
Updates /
Changes
|
Recurring revenue
growth constant currency - Non-GAAP
|
|
6 -
9%
|
No Change
|
Adjusted Operating
income margin - Non-GAAP
|
|
Increase of ~50
bps
|
No Change
|
Adjusted earnings per
share growth - Non-GAAP
|
|
7 -
11%
|
No Change
|
Closed sales
|
|
$270 -
$310M
|
No Change
|
Financial Results for First Quarter Fiscal Year 2023 compared
to First Quarter Fiscal Year 2022
- Total revenues increased 8% to $1,283 million from $1,193
million in the prior year period.
-
- Recurring revenues increased $56
million, or 7%, from $750
million. Organic growth of 9% was driven by 5pts of Net New
Business and 5pts of Internal Growth. The growth in Net New
Business contributed to growth in both ICS and GTO Recurring
revenues. Internal Growth was driven primarily by growth within our
GTO business.
- Recurring revenue growth constant currency was 9% as changes in
foreign currency reduced Recurring revenue growth by 2pts.
- Event-driven revenues decreased $14
million, or 18%, to $63
million, primarily due to the decrease in volume of mutual
fund proxy communications.
- Distribution revenues increased $48
million, or 13%, to $415
million, primarily driven by the impact of current year
postage rate increase of approximately $38
million, as well as an increase from higher volumes of
mailings in our Customer Communications business.
- Operating income was $88
million, a decrease of $16 million, or 15%. Operating
income margin decreased to 6.8%, compared to 8.7% for the prior
year period, due to lower event-driven revenues, an increase in
low-margin distribution revenues, growth investments and other
expenses, more than offsetting growth in Recurring revenues and
lower amortization expense from acquired intangible assets.
-
- Adjusted Operating income was $150 million, a decrease of $27 million, or 15%. The decrease was primarily
driven by lower event-driven revenues, growth investments and other
spending, partially offset by higher Recurring revenues. Adjusted
Operating income margin decreased to 11.7% compared to 14.8% for
the prior year period. An increase in pass through distribution
revenues negatively impacted margins by approximately 90 basis
points.
- Interest expense, net was $27
million, an increase of $4
million, primarily due to an increase in interest expense
from higher borrowing costs, partially offset by savings from the
Company's cross-currency swap transaction.
- The effective tax rate was 9.0% compared to 14.1% in the
prior year period. The decrease in the effective tax rate was
driven by the excess tax benefits related to equity compensation
and other discrete tax benefits, relative to pre-tax income
compared to the prior year period.
- Net earnings decreased 25% to $50
million and Adjusted Net earnings decreased 21% to
$100 million.
-
- Diluted earnings per share decreased 26% to $0.42, compared to $0.57 in the prior year period, and
- Adjusted earnings per share decreased 21% to
$0.84, compared to $1.07 in the prior year period.
Segment and Other Results for First Quarter Fiscal Year 2023
compared to First Quarter Fiscal Year 2022
Investor Communication Solutions ("ICS")
- ICS total revenues were $921
million, an increase of $67
million, or 8%.
-
- Recurring revenues increased $33
million or 8%, to $443
million. Organic growth contributed 9pts of growth from a
combination of new sales and Internal Growth.
- Recurring revenue growth constant currency was 9% as changes in
foreign currency reduced Recurring revenue growth by 1pt.
- Event-driven revenues decreased $14
million, or 18%, to $63
million, primarily due to the decrease in volume of mutual
fund proxy communications.
- Distribution revenues increased $48
million, or 13%, to $415
million primarily driven by the impact of current year
postage rate increase of approximately $38
million, as well as an increase from higher volumes of
mailings in our Customer communications business.
- ICS earnings before income taxes declined $22 million, or 27% to $60
million as segment operating expenses rose 12%, or
$90 million, to $861 million. The earnings benefit from higher
Recurring revenue was offset by lower event-driven revenue, higher
postage and distribution expenses, and increased costs from prior
year investments. Amortization expense from acquired intangibles
decreased by $5 million to
$15 million in the first quarter of
fiscal year 2023. Pre-tax margins decreased to 6.5% from 9.7%.
Global Technology and Operations ("GTO")
- GTO Recurring revenues were $363
million, an increase of $23
million, or 7%. The increase was attributable to 10pts of
organic growth driven by a combination of Internal Growth and new
sales.
- Recurring revenue growth constant currency was 10% as changes
in foreign currency reduced Recurring revenue growth by 4pts.
- GTO earnings before income taxes were $40 million, an increase of $22 million, or 117%. The increase was driven
primarily by the $23 million growth
in Recurring revenues compared to the prior year period. Pre-tax
margins increased to 11.1% from 5.5%. Amortization expense from
acquired intangibles decreased by $7
million to $40 million in the
first quarter of fiscal year 2023 period due to a combination of
the impact of foreign exchange and the run-off of older
acquisitions.
Other
- Other loss before income tax increased to $45 million from $23
million in the prior year period, primarily due to
$8 million of higher general and
administrative expenses, $8 million
in higher net interest expense and investment losses, and
$3 million in Russia-Related Exit Costs.
Change in Foreign Exchange Rates
Beginning with the first quarter of fiscal year 2023, the
Company changed reporting for segment revenues, segment earnings
(loss) before income taxes, segment amortization of acquired
intangibles and purchased intellectual property, and Closed sales
to reflect the impact of actual foreign exchange rates applicable
to the individual periods presented. The presentation of these
metrics for the prior periods 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 26, 2022.
Earnings Conference Call
An analyst conference call will be held today, November 2, 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 November 9,
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 4447835 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,
Free cash flow, and Recurring revenue growth constant currency.
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 are 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, and (iv) Russia-Related Exit Costs. Amortization
of Acquired Intangibles and Purchased Intellectual Property
represents non-cash amortization expenses associated with the
Company's acquisition activities. Acquisition and Integration Costs
represent certain transaction and integration costs associated with
the Company's acquisition activities. 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.
We exclude Acquisition and Integration Costs, Real Estate
Realignment and Covid-19 Related Expenses, and Russia-Related Exit
Costs 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 less
Capital expenditures as well as Software purchases and capitalized
internal use software.
Recurring revenue growth constant currency
As a multi-national company, we are subject to variability of
our reported U.S. dollar results due to changes in foreign currency
exchange rates. The exclusion of the impact of foreign currency
exchange fluctuations from our Recurring revenue growth, or what we
refer to as amounts expressed "on a constant currency basis," is a
Non-GAAP measure. We believe that excluding the impact of foreign
currency exchange fluctuations from our Recurring revenue growth
provides additional information that enables enhanced comparison to
prior periods.
Changes in Recurring revenue growth expressed on a constant
currency basis are presented excluding the impact of foreign
currency exchange fluctuations. To present this information,
current period results for entities reporting in currencies other
than the U.S. dollar are translated into U.S. dollars at the
average exchange rates in effect during the corresponding period of
the comparative year, rather than at the actual average exchange
rates in effect during the current fiscal year.
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 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
September 30,
|
|
|
2022
|
|
2021
|
Revenues
|
|
$ 1,283.3
|
|
$ 1,192.9
|
Operating
expenses:
|
|
|
|
|
Cost of
revenues
|
|
990.4
|
|
914.1
|
Selling, general and
administrative expenses
|
|
205.3
|
|
175.5
|
Total operating
expenses
|
|
1,195.7
|
|
1,089.6
|
Operating
income
|
|
87.5
|
|
103.3
|
Interest expense,
net
|
|
(26.9)
|
|
(22.6)
|
Other non-operating
expense, net
|
|
(5.2)
|
|
(2.4)
|
Earnings before income
taxes
|
|
55.4
|
|
78.2
|
Provision for income
taxes
|
|
5.0
|
|
11.0
|
Net earnings
|
|
$
50.4
|
|
$
67.2
|
|
|
|
|
|
Basic earnings per
share
|
|
$
0.43
|
|
$
0.58
|
Diluted earnings per
share
|
|
$
0.42
|
|
$
0.57
|
|
|
|
|
|
Weighted-average shares
outstanding:
|
|
|
|
|
Basic
|
|
117.5
|
|
116.2
|
Diluted
|
|
118.9
|
|
118.3
|
|
Amounts may not sum
due to rounding.
|
Condensed
Consolidated Balance Sheets
|
(Unaudited)
|
|
In millions, except
per share amounts
|
|
|
September 30,
2022
|
|
June 30,
2022
|
Assets
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
$
227.1
|
|
$
224.7
|
Accounts receivable,
net of allowance for doubtful accounts of
$6.1 and $6.8, respectively
|
|
|
840.1
|
|
946.9
|
Other current
assets
|
|
|
154.9
|
|
156.8
|
Total current
assets
|
|
|
1,222.0
|
|
1,328.4
|
Property, plant and
equipment, net
|
|
|
145.1
|
|
150.9
|
Goodwill
|
|
|
3,434.0
|
|
3,484.9
|
Intangible assets,
net
|
|
|
1,003.3
|
|
1,077.1
|
Deferred client
conversion and start-up costs
|
|
|
1,359.8
|
|
1,232.3
|
Other non-current
assets
|
|
|
926.5
|
|
895.3
|
Total
assets
|
|
|
$
8,090.6
|
|
$
8,168.8
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Payables and accrued
expenses
|
|
|
$
816.0
|
|
$
1,114.9
|
Contract
liabilities
|
|
|
175.7
|
|
198.5
|
Total current
liabilities
|
|
|
991.7
|
|
1,313.4
|
Long-term
debt
|
|
|
4,064.2
|
|
3,793.0
|
Deferred
taxes
|
|
|
447.3
|
|
446.1
|
Contract
liabilities
|
|
|
213.4
|
|
215.8
|
Other non-current
liabilities
|
|
|
470.3
|
|
481.5
|
Total
liabilities
|
|
|
6,186.9
|
|
6,249.8
|
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, 117.7 and
117.3
shares, respectively
|
|
|
1.6
|
|
1.6
|
Additional paid-in
capital
|
|
|
1,379.8
|
|
1,344.7
|
Retained
earnings
|
|
|
2,789.1
|
|
2,824.0
|
Treasury stock, at
cost: 36.8 and 37.2 shares, respectively
|
|
|
(2,017.7)
|
|
(2,024.8)
|
Accumulated other
comprehensive income (loss)
|
|
|
(249.2)
|
|
(226.3)
|
Total stockholders'
equity
|
|
|
1,903.7
|
|
1,919.1
|
Total liabilities and
stockholders' equity
|
|
|
$
8,090.6
|
|
$
8,168.8
|
|
Amounts may not sum
due to rounding.
|
Condensed
Consolidated Statements of Cash Flows
|
(Unaudited)
|
|
In
millions
|
Three Months
Ended
September
30,
|
|
2022
|
|
2021
|
Cash Flows From
Operating Activities
|
|
|
|
Net earnings
|
$
50.4
|
|
$
67.2
|
Adjustments to
reconcile net earnings to net cash flows used in operating
activities:
|
|
|
|
Depreciation and
amortization
|
$
20.7
|
|
20.4
|
Amortization of
acquired intangibles and purchased intellectual property
|
55.9
|
|
68.7
|
Amortization of other
assets
|
32.1
|
|
30.9
|
Stock-based
compensation expense
|
15.6
|
|
13.6
|
Deferred income
taxes
|
(9.7)
|
|
(3.0)
|
Other
|
3.5
|
|
0.9
|
Changes in operating
assets and liabilities, net of assets and liabilities
acquired:
|
|
|
|
Current assets and
liabilities:
|
|
|
|
Decrease in Accounts receivable, net
|
115.6
|
|
96.6
|
Decrease in Other current assets
|
1.5
|
|
1.6
|
Decrease in Payables and accrued expenses
|
(319.3)
|
|
(324.7)
|
Decrease in Contract liabilities
|
(17.1)
|
|
(5.8)
|
Non-current assets and
liabilities:
|
|
|
|
Increase in Other non-current assets
|
(167.4)
|
|
(119.8)
|
Increase in Other non-current liabilities
|
13.6
|
|
18.1
|
Net cash flows used in
operating activities
|
(204.5)
|
|
(135.4)
|
Cash Flows From
Investing Activities
|
|
|
|
Capital
expenditures
|
(5.5)
|
|
(5.7)
|
Software purchases and
capitalized internal use software
|
(8.1)
|
|
(10.2)
|
Acquisitions, net of
cash acquired
|
—
|
|
(13.3)
|
Other investing
activities
|
—
|
|
(7.1)
|
Net cash flows used in
investing activities
|
(13.6)
|
|
(36.4)
|
Cash Flows From
Financing Activities
|
|
|
|
Debt
proceeds
|
410.0
|
|
380.0
|
Debt
repayments
|
(140.0)
|
|
(100.0)
|
Dividends
paid
|
(75.0)
|
|
(66.8)
|
Purchases of Treasury
stock
|
(2.1)
|
|
—
|
Proceeds from exercise
of stock options
|
30.2
|
|
8.7
|
Other financing
activities
|
(0.3)
|
|
(4.9)
|
Net cash flows provided
by financing activities
|
222.8
|
|
217.0
|
Effect of exchange rate
changes on Cash and cash equivalents
|
(2.3)
|
|
(3.1)
|
Net change in Cash and
cash equivalents
|
2.4
|
|
42.2
|
Cash and cash
equivalents, beginning of period
|
224.7
|
|
274.5
|
Cash and cash
equivalents, end of period
|
$
227.1
|
|
$
316.7
|
|
Amounts may not sum
due to rounding.
|
Segment
Results
|
(Unaudited)
|
|
In
millions
|
Three Months
Ended
September
30,
|
|
2022
|
|
2021
|
Revenues
|
|
Investor Communication
Solutions
|
$
920.6
|
|
$
853.4
|
Global Technology and
Operations
|
362.7
|
|
339.4
|
Total
|
$ 1,283.3
|
|
$ 1,192.9
|
|
|
Earnings before
Income Taxes
|
|
Investor Communication
Solutions
|
$
60.0
|
|
$
82.4
|
Global Technology and
Operations
|
40.3
|
|
18.6
|
Other
|
(44.8)
|
|
(22.8)
|
Total
|
$
55.4
|
|
$
78.2
|
|
|
|
|
Pre-tax
margins:
|
|
|
|
Investor Communication
Solutions
|
6.5 %
|
|
9.7 %
|
Global Technology and
Operations
|
11.1 %
|
|
5.5 %
|
|
|
Amortization of
acquired intangibles and purchased intellectual
property
|
Investor Communication
Solutions
|
$
15.5
|
|
$
20.9
|
Global Technology and
Operations
|
40.4
|
|
47.8
|
Total
|
$
55.9
|
|
$
68.7
|
|
|
|
|
|
Amounts may not sum
due to rounding.
|
Supplemental
Reporting Detail - Additional Product Line
Reporting
|
(Unaudited)
|
|
In
millions
|
Three Months
Ended
September
30,
|
|
2022
|
|
2021
|
|
%
Change
|
Investor
Communication Solutions
|
|
|
|
|
|
Regulatory
|
$
170.8
|
|
$
165.4
|
|
3 %
|
Data-driven fund
solutions
|
92.5
|
|
83.2
|
|
11 %
|
Issuer
|
23.9
|
|
20.6
|
|
16 %
|
Customer
communications
|
155.9
|
|
140.9
|
|
11 %
|
Total ICS Recurring revenues
|
443.1
|
|
410.2
|
|
8 %
|
|
|
|
|
|
|
Equity and
other
|
29.5
|
|
27.6
|
|
7 %
|
Mutual
funds
|
33.2
|
|
48.8
|
|
(32 %)
|
Total ICS Event-driven revenues
|
62.7
|
|
76.3
|
|
(18 %)
|
|
|
|
|
|
|
Distribution
revenues
|
414.8
|
|
367.0
|
|
13 %
|
|
|
|
|
|
|
Total ICS
Revenues
|
$
920.6
|
|
$
853.4
|
|
8 %
|
|
|
|
|
|
|
Global Technology
and Operations
|
|
|
|
|
|
Capital
markets
|
$
226.7
|
|
$
208.6
|
|
9 %
|
Wealth and investment
management
|
136.0
|
|
130.8
|
|
4 %
|
Total GTO Recurring revenues
|
362.7
|
|
339.4
|
|
7 %
|
|
|
|
|
|
|
Total Revenues
|
$
1,283.3
|
|
$
1,192.9
|
|
8 %
|
|
|
|
|
|
|
Revenues by
Type
|
|
|
|
|
|
Recurring
revenues
|
$
805.8
|
|
$
749.6
|
|
7 %
|
Event-driven
revenues
|
62.7
|
|
76.3
|
|
(18 %)
|
Distribution
revenues
|
414.8
|
|
367.0
|
|
13 %
|
Total Revenues
|
$
1,283.3
|
|
$
1,192.9
|
|
8 %
|
|
Amounts may not sum
due to rounding.
|
Select Operating
Metrics
|
(Unaudited)
|
|
|
Three Months
Ended
September 30,
|
|
|
In
millions
|
2022
|
|
2021
|
|
%
Change
|
|
|
|
|
|
|
Closed
sales1
|
$29.0
|
|
$29.7
|
|
(2 %)
|
|
|
|
|
|
|
Record
Growth2
|
|
|
|
|
|
Equity
proxy
|
9 %
|
|
39 %
|
|
|
Mutual fund
interims
|
11 %
|
|
9 %
|
|
|
|
|
|
|
|
|
Internal Trade
Growth3
|
6 %
|
|
2 %
|
|
|
|
|
|
|
|
|
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
September
30,
|
|
2022
|
|
2021
|
Reconciliation of
Adjusted Operating Income
|
|
Operating income
(GAAP)
|
$ 87.5
|
|
$
103.3
|
Adjustments:
|
|
|
|
Amortization of
Acquired Intangibles and Purchased Intellectual Property
|
55.9
|
|
68.7
|
Acquisition and
Integration Costs
|
4.1
|
|
2.9
|
Real Estate
Realignment and Covid-19 Related Expenses (a)
|
—
|
|
1.8
|
Russia-Related
Exit Costs
|
2.6
|
|
—
|
Adjusted Operating
income (Non-GAAP)
|
$
150.1
|
|
$
176.7
|
Operating income margin
(GAAP)
|
6.8 %
|
|
8.7 %
|
Adjusted Operating
income margin (Non-GAAP)
|
11.7 %
|
|
14.8 %
|
|
|
|
|
Reconciliation of
Adjusted Net earnings
|
|
Net earnings
(GAAP)
|
$ 50.4
|
|
$ 67.2
|
Adjustments:
|
|
|
|
Amortization of
Acquired Intangibles and Purchased Intellectual Property
|
55.9
|
|
68.7
|
Acquisition and
Integration Costs
|
4.1
|
|
2.9
|
Real Estate
Realignment and Covid-19 Related Expenses (a)
|
—
|
|
1.8
|
Russia-Related Exit
Costs
|
2.6
|
|
—
|
Subtotal of
adjustments
|
62.5
|
|
73.4
|
Tax impact of
adjustments (c)
|
(13.2)
|
|
(14.4)
|
Adjusted Net earnings
(Non-GAAP)
|
$ 99.7
|
|
$
126.3
|
|
|
|
|
Reconciliation of
Adjusted EPS
|
|
|
|
Diluted earnings per
share (GAAP)
|
$ 0.42
|
|
$ 0.57
|
Adjustments:
|
|
|
|
Amortization of
Acquired Intangibles and Purchased Intellectual Property
|
0.47
|
|
0.58
|
Acquisition and
Integration Costs
|
0.03
|
|
0.02
|
Real Estate
Realignment and Covid-19 Related Expenses (b)
|
—
|
|
0.02
|
Russia-Related Exit
Costs
|
0.02
|
|
—
|
Subtotal of
adjustments
|
0.53
|
|
0.62
|
Tax impact of
adjustments (c)
|
(0.11)
|
|
(0.12)
|
Adjusted earnings per
share (Non-GAAP)
|
$ 0.84
|
|
$ 1.07
|
|
(a) Real Estate
Realignment and Covid-19 Related Expenses were ($0.1 million) and
$1.9 million, respectively, for the three months ended September
30, 2021.
|
|
(b) Real Estate
Realignment Expenses impacted Adjusted earnings per share by $0.00
for the three months ended September 30, 2021. Covid-19 Related
Expenses impacted Adjusted earnings per share by $0.02 for the
three months ended September 30, 2021.
|
|
(c) Calculated using
the GAAP effective tax rate, adjusted to exclude $6.7 million and
$4.3 million of excess tax benefits associated with stock-based
compensation for the three months ended September 30, 2022 and
2021, respectively. For purposes of calculating the Adjusted
earnings per share, the same adjustments were made on a per share
basis.
|
|
Three Months
Ended
September 30,
|
|
2022
|
|
2021
|
Reconciliation of
Free Cash Flow
|
|
Net cash flows used in
operating activities (GAAP)
|
$ (204.5)
|
|
$ (135.4)
|
Capital expenditures
and Software purchases and capitalized internal use
software
|
(13.6)
|
|
(15.9)
|
Free cash flow
(Non-GAAP)
|
$ (218.1)
|
|
$ (151.4)
|
|
|
|
|
Reconciliation of
Recurring Revenue Growth Constant Currency
|
|
|
|
|
|
Three Months Ended
September 30, 2022
|
|
|
|
|
Investor
Communications Solutions
|
Regulatory
|
|
Data-
Driven
Fund
Solutions
|
|
Issuer
|
|
Customer
Comms
|
|
Total
|
Recurring revenue
growth (GAAP)
|
3 %
|
|
11 %
|
|
16 %
|
|
11 %
|
|
8 %
|
Impact of foreign
currency exchange
|
— %
|
|
2 %
|
|
— %
|
|
— %
|
|
1 %
|
Recurring revenue
growth constant currency (Non-GAAP)
|
4 %
|
|
13 %
|
|
16 %
|
|
11 %
|
|
9 %
|
|
Three Months Ended
September 30, 2022
|
|
|
|
|
Global Technology
and Operations
|
Capital
Markets
|
|
Wealth and
Investment
Management
|
|
Total
|
Recurring revenue
growth (GAAP)
|
9 %
|
|
4 %
|
|
7 %
|
Impact of foreign
currency exchange
|
5 %
|
|
2 %
|
|
4 %
|
Recurring revenue
growth constant currency (Non-GAAP)
|
14 %
|
|
5 %
|
|
10 %
|
|
Three Months
Ended September
30, 2022
|
|
|
Consolidated
|
Total
|
Recurring revenue
growth (GAAP)
|
7 %
|
Impact of foreign
currency exchange
|
2 %
|
Recurring revenue
growth constant currency (Non-GAAP)
|
9 %
|
|
Amounts may not sum
due to rounding.
|
2023
Guidance
|
Reconciliation of
Non-GAAP to GAAP Measures
|
(Unaudited)
|
|
FY23 Recurring revenue
growth (a)
|
|
|
Impact of foreign
currency exchange
|
|
—
|
Recurring revenue
growth constant currency - Non-GAAP
|
|
6 - 9%
|
|
|
|
FY23 Adjusted Operating
income margin (b)
|
|
|
Operating income
margin % - GAAP
|
|
Increase of ~ 150
bps
|
Adjusted Operating
income margin % - Non-GAAP
|
|
Increase of ~ 50
bps
|
|
|
|
FY23 Adjusted earnings
per share growth rate (c)
|
|
|
Diluted earnings per
share - GAAP
|
|
~13 - 17%
growth
|
Adjusted earnings per
share - Non-GAAP
|
|
7 - 11%
growth
|
|
(a) The Company is
unable to reconcile its forward-looking Recurring revenue growth
constant currency fiscal year 2023 guidance without unreasonable
efforts because of the uncertainty in the amounts of future foreign
currency exchange rates. For the same reason, the Company is unable
to address the probable significance of the unavailable
information, which could be material to future results.
|
|
(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
$255 million.
|
|
(c) 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 $1.66
per share.
|
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content:https://www.prnewswire.com/news-releases/broadridge-reports-first-quarter-fiscal-2023-results-301665672.html
SOURCE Broadridge Financial Solutions, Inc.