Broadridge reports Q4 and fiscal year results

Source: Broadridge Financial Solutions, Inc.

Broadridge Financial Solutions, Inc. (NYSE: BR) today reported financial results for the fourth quarter and fiscal year ended June 30, 2015.

Fourth Quarter Fiscal Year 2015 Results:

  • Recurring fee revenues increased 7% to $606 million
  • Total revenues increased 5% to $930 million
  • Adjusted Net earnings increased 19% to $172 million
  • Net earnings increased 18% to $166 million
  • Adjusted Diluted earnings per share increased 21% to $1.40
  • Diluted earnings per share increased 19% to $1.35
  • Recurring revenue closed sales decreased 41% to $39 million

Fiscal Year 2015 Results:

  • Recurring fee revenues increased 6% to $1.741 billion
  • Total revenues increased 5% to $2.694 billion
  • Adjusted Net earnings increased 10% to $307 million
  • Net earnings increased 9% to $287 million
  • Adjusted Diluted earnings per share increased 10% to $2.47
  • Diluted earnings per share increased 9% to $2.32
  • Recurring revenue closed sales increased 15% to $146 million


Richard J. Daly, president and chief executive officer, commented, "I am pleased with our performance in fiscal year 2015. The strong fourth quarter performance enabled Broadridge to achieve another record year driven by 10% growth in Adjusted Diluted EPS primarily from Net New Business and record recurring revenue closed sales, which grew 15%. The very strong recurring revenue closed sales results coupled with our exceptional client revenue retention levels highlight the value that Broadridge is creating for our clients."

Mr. Daly added, "Given our financial strength and confidence in the business, the Board has raised our annual dividend amount by 11% to $1.20 per share, representing the eighth consecutive annual increase in our dividend. Additionally, our strong free cash flows have enabled us to continue to return capital to our stockholders through increased levels of share repurchases, while also investing in our business by completing four tuck-in acquisitions during fiscal 2015."

Mr. Daly concluded, "Given the strong fiscal year 2015 performance, I remain confident in Broadridge's ability to continue to successfully execute our long term strategy and achieve our three-year performance objectives which, on a compounded annual growth rate basis, include recurring fee revenue growth of 7% to 10% and adjusted net earnings growth of 9% to 11%. Our fiscal year 2016 guidance is highlighted by planned strong recurring fee revenue growth of 10% to 12% and Adjusted Diluted earnings per share growth of 8% to 12%. This guidance is consistent with our three-year performance objectives. We believe we are well positioned to continue to generate sustainable top quartile total shareholder return going forward."

Financial Results for Fourth Quarter Fiscal Year 2015

For the fourth quarter of fiscal year 2015, revenues increased $44 million, or 5%, to $930 million, compared to $886 million for the prior year period. The increase was driven by higher recurring fee revenues of approximately $40 million, or 7%, as a result of Net New Business (defined by the Company as recurring revenue from closed sales less recurring revenue from client losses) (3 pts), contributions from acquisitions (2 pts), and internal growth (2 pts). Pre-tax margins were 27.5% compared to 23.3% for the prior year period. Adjusted Pre-tax margins were 28.4%, compared to 24.1% for the same period last year.

For the fourth quarter of fiscal year 2015, Net earnings increased $26 million, or 18%, to $166 million, compared to $140 million for the prior year period, due to higher revenues and lower strategic initiative spend. Adjusted Net earnings increased $27 million, or 19% to $172 million, compared to $145 million for the same period last year. Diluted earnings per share increased 19% to $1.35 per share, compared to $1.13 per share in the same period last year. Adjusted Diluted earnings per share increased 21% to $1.40 per share, compared to $1.16 per share for the same period last year. Acquisition Amortization and Other Costs, net of taxes decreased Diluted earnings per share by $0.05 and $0.04 for the three months ended June 30, 2015 and 2014, respectively.

In addition, during the fourth quarter, the Company repurchased approximately 2.2 million shares of Broadridge common stock at an average price of $53.57 per share under its stock repurchase program.

Analysis of Fourth Quarter Fiscal Year 2015

Investor Communication Solutions

Revenues for the Investor Communication Solutions segment increased $48 million, or 7%, to $766 million in the fourth quarter of fiscal year 2015, compared to $718 million in the fourth quarter of fiscal year 2014. The increase was attributable to higher recurring fee revenues which contributed $33 million, higher event-driven fee revenues which contributed $4 million, and an $11 million increase in distribution revenues. Higher recurring fee revenues of 8% were driven by contributions from our recent acquisitions (3 pts), market-based internal growth activities (3 pts), and Net New Business (2 pts). Position growth, a component of internal growth, was 7% for mutual fund interim communications and 6% for annual equity proxy communications, compared to the same period in the prior year. Higher event-driven fee revenues were primarily from increased proxy contest activity. Pre-tax margins increased by 160 basis points to 32.1% as a result of higher fee revenues combined with lower strategic initiative spend.

Global Technology and Operations (formerly known as Securities Processing Solutions)

Revenues for the Global Technology and Operations segment increased $7 million, or 4%, to $178 million in the fourth quarter of fiscal year 2015 compared to $171 million in the fourth quarter of fiscal year 2014. The increase was attributable to higher Net New Business (3 pts) and the contribution from a recent acquisition (1 pt). Pre-tax margins increased by 720 basis points to 16.1% primarily as a result of lower strategic initiative spend.

Other

Pre-tax loss decreased by $10 million in the fourth quarter of fiscal year 2015 compared to the same period last year, primarily due to a $5 million decrease in performance-based compensation and benefits expenses and a $3 million decrease in strategic initiative spend.

Financial Results for Fiscal Year 2015

For the fiscal year ended June 30, 2015, revenues increased $136 million, or 5%, to $2.694 billion, compared to $2.558 billion for the comparable period last year. The $136 million increase was driven by higher recurring fee revenues of $99 million, higher distribution revenues of $45 million, and higher event-driven fee revenues of $17 million. The positive contribution from recurring fee revenues reflected gains from Net New Business (3 pts), contributions from acquisitions (2 pts), and internal growth (1 pt). Fluctuations in foreign currency exchange rates unfavorably impacted revenues by $25 million. Pre-tax margins of 16.3% increased compared to 15.5% for the previous fiscal year, primarily due to higher revenues and operating leverage. Adjusted Pre-tax margins of 17.4% increased compared to 16.4% for the same period last year.

For the fiscal year ended June 30, 2015, Net earnings of $287 million increased 9%, compared to $263 million in the comparable period last year. Adjusted Net earnings increased to $307 million, or 10%, compared to $279 million in the prior year period. Diluted earnings per share increased to $2.32 per share compared to $2.12 per share for the comparable period last year. Adjusted Diluted earnings per share were $2.47 per share compared to $2.25 per share for the comparable period last year. Acquisition Amortization and Other Costs, net of taxes decreased Diluted earnings per share by $0.16 and $0.13 for the fiscal years ended June 30, 2015 and 2014, respectively.

During the fiscal year ended 2015, our recurring revenue closed sales increased 15% from last year's comparable period to $146 million. During fiscal year 2015 Free cash flows increased 9% to $365 million from $334 million in the prior year. During fiscal year 2015, the Company repurchased approximately 5.2 million shares of Broadridge common stock at an average price of $52.18 per share under its stock repurchase program.

Dividend Declaration and Increase

On August 6, 2015, the Company's Board of Directors approved a quarterly dividend of $0.30 per share payable on October 1, 2015 to stockholders of record on September 15, 2015. This declaration reflects the Board's approval of an increase in the annual dividend amount by approximately 11% from $1.08 per share to $1.20 per share, subject to the discretion of the Board of Directors to declare quarterly dividends. With this increase, the Company's annual dividend has increased for the eighth consecutive year since its first full year of dividend payments in fiscal year 2008.

Share Repurchase Authorization

In addition, on August 6, 2015, the Board also authorized the repurchase of up to an additional 5.3 million shares of Broadridge common stock. The share repurchases will be made in the open market or privately negotiated transactions in compliance with applicable legal requirements and other factors. With this authorization, the Company currently has approximately 10.0 million shares available for repurchase under its share repurchase program.

Contributed | what does this mean?
This content is contributed or sourced from third parties but has been subject to Finextra editorial review.

Comments: (0)

sponsored

Featured job
All Jobs »