01—Abstract
Summary
Summary of the 10-K filed August 29, 2008. Cited figures are marked; the original filing is the authoritative source.
Automatic Data Processing, Inc. (ADP) reported strong financial performance for the fiscal year ended June 30, 2008, with consolidated revenues from continuing operations growing 13% to $8.78 billiona.
Diluted earnings per share from continuing operations saw a significant increase of 20% to $2.20b, reflecting effective cost management and share repurchases. The company's core Employer Services segment continued its robust growth, complemented by strong performance in PEO Services and Dealer Services. ADP highlighted its strategic focus on high-growth, under-penetrated markets, evidenced by the divestiture of non-strategic businesses in prior periods.
The company's balance sheet remains solid, with substantial cash and marketable securities. ADP reiterated its commitment to returning excess cash to stockholders through share buybacks and dividends, with a significant repurchase of common stock during the fiscal year. The company is well-positioned to navigate the economic environment, emphasizing its diversified business model and commitment to innovation.
02—Key points
Key Highlights
- Consolidated revenues grew 13% to $8.78 billion in fiscal year 2008.
- Diluted earnings per share (EPS) from continuing operations increased 20% to $2.20.
- Employer Services, the largest segment, saw a 9% revenue increase.
- PEO Services and Dealer Services also demonstrated strong revenue growth at 20% and 9% respectively.
- The company maintained a strong financial position with $1.66 billion in cash and marketable securities.
- ADP repurchased 32.9 million shares of its common stock during fiscal year 2008.
- The company's investment portfolio is protected from sub-prime mortgage related assets and is focused on investment-grade securities.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2008filed August 29, 2008Financial Statements
| Revenue | $8.73B |
| SG&A Expenses | $2.36B |
| Operating Expenses | $7.10B |
| Interest Expense | $80.50M |
| Net Income | $1.24B |
| EPS (Basic) | $2.37 |
| EPS (Diluted) | $2.34 |
| Shares Outstanding (Basic) | 521.50M |
| Shares Outstanding (Diluted) | 527.20M |
05—Questions
Frequently Asked Questions
What was ADP's total revenue for the fiscal year ended June 30, 2008, and how does it compare to the previous year?
For the fiscal year ended June 30, 2008, ADP reported total revenues of $8,776.5 million, an increase of 13% compared to $7,800.0 million in the fiscal year ended June 30, 2007.
How did ADP's earnings per share (EPS) perform in fiscal year 2008?
Diluted earnings per share (EPS) from continuing operations increased by 20% to $2.20 for the fiscal year ended June 30, 2008, up from $1.83 in the prior fiscal year. This increase was driven by higher earnings from continuing operations before income taxes and a lower effective tax rate, partially offset by a decline in other income.
What is the company's strategy regarding non-strategic businesses?
ADP has been divesting certain non-strategic, slow-growing businesses to focus on core areas with strong growth attributes and under-penetrated markets. Examples include the spin-off of its Brokerage Services Group and the divestiture of Sandy Corporation and its Travel Clearing business.
How does ADP manage its investment portfolio and what is its exposure to risky assets?
ADP's investment portfolio is managed with safety of principal, liquidity, and diversification as primary goals. The company explicitly stated that its investment portfolio does not contain asset-backed securities with underlying collateral of sub-prime mortgages or home equity loans, CDOs, CLOs, credit default swaps, asset-backed commercial paper, auction rate securities, structured investment vehicles, or non-investment-grade securities. Investments are primarily in investment-grade bonds and senior tranches of AAA fixed-rate securities.
06—Continue