News Release

 

1
2014 News Releases
1
2013 News Releases
1
1

Broadridge Begins Investor Road Show on March 21, 2007
for Upcoming Spin-Off From ADP


Provides Financial Outlook as Standalone Company

 

 


Investors:
Marvin Sims
(212) 981-1427
Media:
Dorothy Friedman
(212) 918-6920

 

NEW YORK, New York -- March 21, 2007 -- Broadridge Financial Solutions, LLC, which immediately prior to the spin-off will convert to a Delaware corporation, Broadridge Financial Solutions, Inc. ("Broadridge"), announced today that it will begin making presentations to the equity investment community in preparation for its planned March 30, 2007 spin-off from Automatic Data Processing, Inc. (NYSE: ADP). The meetings will be led by Richard Daly, Chief Executive Officer and Dan Sheldon, Chief Financial Officer. Other members of the management team, including Executive Chairman Art Weinbach, will also be in attendance at selected group meetings. The company's road show presentation and a video presentation are available on the ADP Investor Relations home page http://www.investquest.com/InvestQuest/a/adp/.

 

Financial Outlook

 

Broadridge will provide financial guidance during the presentations. Assuming completion of its separation from ADP on March 30, 2007, Broadridge expects revenue growth for fiscal year ending June 30, 2007 of 7% to 9% from fiscal 2006 revenue of $1.93 billion. For fiscal year ending June 30, 2007, the company expects operating income growth, excluding expenses related to its spin-off from ADP, interest expense on new debt, and public company expenses, of 9% to 14% from fiscal year 2006 operating income of $303 million.

 

Our directional view for fiscal year 2008, after taking into consideration the two anticipated client losses totaling $84.5 million of revenue in fiscal year 2006 as disclosed in the company's Form 10 filing, and the continuation of current market trends, is for revenue growth in the range of 0% to 3%. In addition, the company expects operating income, excluding expenses related to its spin-off from ADP, interest expense on new debt, and public company expenses, to decrease 5% to 10%.

 

Broadridge's long-term objective beyond fiscal year 2008 is to deliver revenue growth of 4% to 6%, operating income growth of 6% to 9% and net income growth of 10% to 15%.

 

Non-GAAP Measures

 

In certain circumstances, results have been presented that are non-GAAP (generally accepted accounting principles) measures and should be viewed in addition to, and not in lieu of, the company's reported results. Reconciliations to comparable GAAP measures are available in the accompanying schedules to this press release.

 

Safe Harbor Compliance Statement for Forward-Looking Statements

 

This document and other written or oral statements made from time to time by Broadridge or ADP 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 like "expects," "assumes," "projects," "anticipates," "estimates," "we believe," "could be" and other words of similar meaning, 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. Factors that could cause actual results to differ materially from those contemplated by the forward-looking statements include: the impact of Broadridge's separation from ADP on the clients, employees and other aspects of Broadridge's business; Broadridge's cost structure and capital structure as a stand-alone company, including its credit ratings and indebtedness; Broadridge's success in obtaining, retaining and selling additional services to clients; the pricing of products and services; changes in laws regulating registered clearing agencies and broker-dealers; overall market and economic conditions; competitive conditions; stock market activity; changes in technology; availability of skilled technical associates and the impact of new acquisitions and divestitures. Broadridge and ADP disclaim any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

 

About Broadridge

 

Broadridge Financial Solutions, Inc. ("Broadridge") formerly ADP Brokerage Services Group, with nearly $2.0 billion in revenues, is a leading provider of investor communications, securities processing, and clearing and outsourcing solutions to the financial services industry. We offer advanced integrated systems and services that are dependable, scalable and cost-efficient. Our products and services enable corporate governance, drive higher levels of efficiency and control, and reduce the need for clients to make significant capital investments in operations infrastructure, thereby allowing them to increase their focus on core business activities. For more information about Broadridge, please visit www.broadridge.com or www.bsg.adp.com

 

Financial Guidance
------------------
($ in millions)
  
                                                                                                                                    Forward
                                                          FY?06A        FY?07E         FY?08E        Outlook
                                                              ------                ------               ------               -------
 
Revenue                                            $1,933    $2,070-$2,100
  % growth                                            13%             7-9%                 0-3%          4-6%


Operating Profit (1)                          $303       $330-$345
  % margin                                         15.70%      15.9-16.4%       14.5-15.0%    16-17%
  % growth                                            11%          9-14%                  (10)-(5)%      6-9%

Net Income/EPS
  % growth                                                                                                                    10-15%


(1) Q4 FY?07E and FY?08E reflect Operating Profit excluding one-time spin
expenses, interest expense on new debt, and additional public company
expenses.


See Appendix for reconciliation.  FY?06 Operating Profit includes stock
compensation expense of $24 and Depreciation and Amortization expense of
$74.




Pro Forma Reconciliation
------------------------


$ in millions, reflects
 continuing operations                                                                           FY'06
                                                                                                      ----------------------------
                                                                                                                                                  Pro
                                                                                                     Form 10        Client       Forma As
                                                                                                          Pro          Adjust-      Adjusted
                                                                                                      Forma(1)       ments(2)        (3)          FY'07E        FY'08E
                                                                                                      --------            ---------         --------         --------        --------
Broadridge Net Revenues                                                     1,849                 85             1,933         2,070-
                                                                                                                                                                           2,100

  Growth %                                                                                                                                  12.6%        7.1-      0.0-3.0%
                                                                                                                                                                            8.6%

ADP Segment Earnings                                                                                                              309        346-
 before Taxes                                                                                                                                                    361

  Margin %                                                                                                                                       16.0%    16.7-
                                                                                                                                                                              17.2%

  Adjustments:
   Stock Compensation                                                                                                                  (24)      (24)
   ADP Royalties                                                                                                                            (35)      (35)
   ADP Corporate Charges                                                                                                             40        40
   Foreign Exchange                                                                                                                          6         3
   Other                                                                                                                                                 6         -
                                                                                                                                                        --------  --------
  Total Adjustments                                                                                                                        (7)      (16)
Broadridge PF Earnings
 Before Royalties Add
 back, Public Company
 Costs, Interest, and                                                                              --------     ---------    --------      --------
 Taxes (4)                                                                                                    266            37         303          330-
                                                                                                                                                                        345
                                                                                                       ========  ========= ========  ========

  Margin %                                                                                                                                 15.7%         15.9-               14.5-
                                                                                                                                                                          16.4%              15.0%

  Growth %                                                                                                                                10.5%             9.0-             (10.0)-
                                                                                                                                                                             14.0%          (5.0)%

  ADP Royalties                                                                35                                                       35               35                  35

Broadridge PF Earnings
 Before Public Company                                              --------                                                  --------        --------
 Costs, Interest, and                                                                                                                                            365-
 Taxes                                                                                  301                                                       338              380
                                                                                        ========                                        ========  ========

  Total Public Company
   Costs (5)(6)                                                                     (30)                                                    (30)             (30)             (30)
                                                                                             --------                                                 --------         --------
Broadridge PF Earnings
 Before Interest and                                                           271                                                      308              335-
 Taxes                                                                                                                                                                       350
                                                                                           ========                                         ========   ========

  Margin %                                                                                                                                        15.9%          16.2-        14.7-
                                                                                                                                                                                   16.7%      15.3%

  Interest on New Debt                                                    (42)                                                       (42)              (42)           (38)

                                                                                              --------                                                   --------            --------
Broadridge PF Earnings                                                 229                                                         266                293-
 Before Taxes                                                                                                                                                                308
                                                                                         ========                                               ========    ========
  Income Taxes at 40%                                                                                                                         (106)          (118)-           40%
                                                                                                                                                                                         (124)

                                                                                                                                                            ========   ========
Broadridge PF Net                                                                                                                               160             175-
 Earnings                                                                                                                                                                        184
                                                                                                                                                             ========   ========

  After-Tax Margin %                                                                                                                          8.3%               8.5-
                                                                                                                                                                                             8.8%


                                                                                              --------                         ---------                   --------           --------       --------
Note:  one-time
 transition costs
 excluded in the above                                                                                                                                                 10-15       5-10

                                                                                             --------                          ---------                   --------             --------    --------

Notes:
(1) See Form 10 filing for details on pro forma adjustments.
(2) Reflects client losses made in Form 10 pro forma.
(3) ADP's Press Release announcing Broadridge as a discontinued
    operation discloses revenues of $1,906 and earnings before taxes
    of $344. The revenue adjustments were for foreign exchange and
    intercompany revenue eliminations of $27, while earnings were adjusted
    to exclude ADP overhead allocations of $7 that are not eligible for
    discontinued operations treatment.
(4) Combination of ADP reporting segments: Brokerage Services and
    Securities Clearing and Outsourcing Services. FY'07 forecast
    prepared in accordance with the same accounting policies as described
    in the Form 10.
(5) FY'06 and FY'07E normalized to reflect full year effect of corporate
    departments and increased benefits and insurance costs.
(6) Estimated cost for the 4th quarter FY'07E will be $7.5 of the
    annualized $30 estimate shown.

 

 

###