Summary
Automatic Data Processing, Inc. (ADP) reported solid financial results for the quarter and six months ended December 31, 2000. The company demonstrated revenue growth across its major segments, with Employer Services and Brokerage Services showing particularly strong performance. Consolidated revenues increased by 13% for the quarter, driven by effective client retention and strategic acquisitions. Despite a notable non-cash write-down on its investment in Bridge Information Systems, ADP's core operations continued to generate robust earnings and strong cash flow, highlighting the resilience and operational efficiency of the business.
Key Highlights
- 1Consolidated revenues increased by 13% to $1.684 billion for the three months ended December 31, 2000, compared to the prior year period.
- 2Employer Services revenue grew 14% year-over-year for the quarter, indicating strong client retention and internal growth.
- 3Brokerage Services revenue saw an 18% increase for the quarter, boosted by the Cunningham Graphics acquisition, though adjusted growth would be higher excluding a large prior year transaction.
- 4Dealer Services revenue experienced a 9% decline for the quarter, attributed to strong Year 2000 influenced results in the prior year.
- 5The company recorded a $45 million pre-tax ($27 million net of tax) write-down of its investment in Bridge Information Systems, impacting net earnings.
- 6Excluding the Bridge write-down, pre-tax earnings increased 28% and net earnings increased 18% for the quarter.
- 7ADP maintained a strong financial position with $2.8 billion in cash and marketable securities and a low long-term debt to equity ratio of 2% at the end of the period.