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Broadridge Financial Solutions Annual Report, Year Ended Jun 30, 2008

Filing Date
Filed August 14, 2008
Period End
June 30, 2008
Security
BR
In the record · 2016–202610-K1110-Q338-K224

BR filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 224 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · Feb ’17Feb ’17
  2. Leadership change8-K · Jun ’19Jun ’19
  3. Leadership change8-K · Aug ’21Aug ’21
  4. Material agreement8-K · Aug ’25Aug ’25

01—Abstract

Summary

Summary of the 10-K filed August 14, 2008. Cited figures are marked; the original filing is the authoritative source.

Broadridge Financial Solutions, Inc. (BR) reported fiscal 2008 (year ended June 30, 2008) net revenues of $2,207.5 milliona, up $69.6 million or 3.3% from $2,137.9 million, while net earnings from continuing operations fell 2.5% to $192.2 million.

Diluted EPS from continuing operations was $1.36b, down from $1.42. Growth came from favorable foreign exchange (a $26.6 million benefit) and internal growth in the three segments, partly offset by two previously announced client losses. Total expenses rose 3.5% to $1,881.6 million, selling, general and administrative expenses rose 12.7% (including $26.6 million in incremental public company costs), and the effective tax rate increased to 41.0% from 38.6%, largely due to a one-time adjustment related to the spin-off from ADP.

Investor Communication Solutions remains the largest segment, with net revenues of $1,575.2 millionc and pre-tax earnings of $255.3 million. Securities Processing Solutions generated $514.4 million in net revenues and pre-tax earnings of $137.5 million, while Clearing and Outsourcing Solutions posted a pre-tax loss of $5.0 million on $95.8 million of net revenues. Cash flow from operations was $482.0 million, and cash and cash equivalents rose to $198.3 million.

Total debt was $447.9 milliond at June 30, 2008, and stockholders' equity was $745.8 million. The company disclosed that one of its two rating agencies downgraded its debt to non-investment grade during the year, which increased borrowing costs. The company, spun off from ADP on March 30, 2007, declared a quarterly dividend of $0.06 per share during fiscal 2008 and on August 4, 2008 raised it to $0.07.

Its Board also authorized repurchase of up to two million shares to offset dilution from equity compensation plans. Investors should weigh the company's reliance on ADP for its data center operations through June 30, 2012, and the concentration of revenue among a small number of clients, with approximately 22% of revenues from five clients.

02—Key points

Key Highlights

  1. Net revenues rose 3.3% to $2,207.5 million, with favorable foreign exchange contributing $26.6 million, offset by the loss of two previously announced large clients.
  2. Net earnings from continuing operations declined 2.5% to $192.2 million; diluted EPS from continuing operations was $1.36 versus $1.42 in fiscal 2007.
  3. Effective tax rate increased to 41.0% from 38.6%, primarily due to a one-time adjustment related to the spin-off from ADP.
  4. Selling, general and administrative expenses rose 12.7% to $244.3 million, including $26.6 million in incremental public company expenses.
  5. Cash flow from operating activities was $482.0 million, and $170.0 million of term loan principal was repaid during the year.
  6. Quarterly dividend was $0.06 per share in fiscal 2008; on August 4, 2008 the Board raised it to $0.07 and authorized repurchase of up to two million shares.
  7. Approximately 22% of revenues came from five clients, and the largest single client accounted for between 5-6% of revenues.

03—Questions

Frequently Asked Questions

  1. How did Broadridge perform financially in fiscal 2008?

    Net revenues increased 3.3% to $2,207.5 million, but net earnings from continuing operations decreased 2.5% to $192.2 million. Diluted EPS from continuing operations was $1.36, compared with $1.42 in fiscal 2007, reflecting higher expenses and a higher effective tax rate.

  2. Which business segment contributes the most revenue and earnings?

    Investor Communication Solutions generated net revenues of $1,575.2 million and pre-tax earnings of $255.3 million in fiscal 2008. Securities Processing Solutions produced $514.4 million in net revenues and $137.5 million in pre-tax earnings, while Clearing and Outsourcing Solutions reported a pre-tax loss of $5.0 million.

  3. What risks does the company face from its relationship with ADP?

    Broadridge purchases a significant portion of its data center services, including disaster recovery, from ADP under an agreement expiring June 30, 2012. Failure by ADP to perform adequately could harm operations. The company also agreed to restrictions to preserve the tax-free treatment of the spin-off and must indemnify ADP for certain taxes if that treatment is not preserved.

  4. How is the company's debt structure and credit standing?

    Total debt was $447.9 million at June 30, 2008, consisting of a $200.0 million term loan and $247.9 million of 6.125% Senior Notes due 2017. During fiscal 2008, one of two rating agencies downgraded the company's debt to non-investment grade, which increased borrowing costs. A $500.0 million revolving credit facility was undrawn at year-end.

  5. What is the company's dividend and share repurchase policy?

    The company paid a quarterly dividend of $0.06 per share throughout fiscal 2008 and on August 4, 2008 increased it to $0.07 per share. The Board also authorized repurchase of up to two million shares, with the stated purpose of offsetting dilution from equity compensation plans.

04—Continue

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