01—Abstract
Summary
Summary of the 10-K filed August 7, 2014. Cited figures are marked; the original filing is the authoritative source.
Broadridge Financial Solutions, Inc. reported fiscal 2014 (year ended June 30, 2014) revenues of $2,558.0 milliona, up $127.2 million, or 5%, from $2,430.8 million in fiscal 2013.
Earnings from continuing operations before income taxes rose to $395.5 millionb from $323.2 million, and net earnings from continuing operations were $263.0 million, or $2.12 diluted earnings per share, compared with $1.69 in fiscal 2013. The company's Investor Communication Solutions segment generated $1,866.9 million of revenue and $336.0 million of pre-tax earnings, while Securities Processing Solutions produced $694.8 million of revenue and $119.1 million of pre-tax earnings. Net cash flows provided by operating activities were $387.7 million, and free cash flows were $334.3 million.
The company's balance sheet at June 30, 2014 showed total assets of $2,192.1 millionc, long-term debt of $524.1 million, and stockholders' equity of $961.7 million. During the year Broadridge issued $400.0 million of 3.95% senior notes due 2020 and repaid its $400.0 million Fiscal 2012 Term Loan. Acquisitions of Bonaire Software Solutions and Emerald Connect totaled $96.9 million in net cash spending.
In August 2014 the Board raised the quarterly cash dividend by $0.06 to $0.27d per share and authorized the repurchase of up to an additional 6,200,000 shares. The filing notes that about 25% of consolidated revenues came from five clients and that the company's proxy and investor communications business is seasonal, with its highest revenues and earnings in the fourth fiscal quarter.
02—Key points
Key Highlights
- Revenues rose 5% to $2,558.0 million in fiscal 2014, driven by $131.2 million of higher recurring fee revenues.
- Diluted EPS from continuing operations increased to $2.12 from $1.69, and net earnings from continuing operations rose to $263.0 million from $212.1 million.
- Pre-tax margin improved to 15.5% from 13.3%, with Securities Processing Solutions pre-tax margin rising to 17.1% from 12.9%.
- Operating cash flow increased to $387.7 million from $270.9 million, and free cash flows rose to $334.3 million from $220.0 million.
- Long-term debt was $524.1 million at June 30, 2014, after the issuance of $400.0 million of 3.95% senior notes due 2020 and repayment of the $400.0 million term loan.
- The Board raised the quarterly dividend to $0.27 per share from $0.21 and authorized up to 6,200,000 additional shares for repurchase.
- About 25% of consolidated revenues came from five clients, and the largest single client accounted for approximately 5%.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2014, Broadridge Financial Solutions kept $0.10.
- Revenue$2.56B100.0%
- Cost of revenue−$1.76B68.9%
- Gross profit$796.6M31.1%
- Operating costs−$401.1M15.7%
- Operating income$395.5M15.5%
- Interest, other & tax−$132.5M5.2%
- Net income$263.0M10.3%
Where FY2014 revenue went
$2.56B- Cost of revenue: $1.76B, 69% of revenue
- SG&A: $378.4M, 15% of revenue
- Net income: $263.0M, 10% of revenue
- Other operating costs: $22.7M, 0.9% of revenue
- Interest, other & tax: $132.5M, 5.2% of revenue
Kept 10% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2014filed August 7, 2014Financial Statements
FY2014 against FY2013
| Line item | FY2014FY2013 | Change |
|---|---|---|
| Revenue | $2.56B$2.43B | +5.2% |
| Cost of Revenue | $1.76B$1.77B | −0.4% |
| Gross Profit | $796.60M$663.00M | +20.2% |
| SG&A Expenses | $378.40M$323.60M | +16.9% |
| Operating Expenses | $2.14B$2.11B | +1.5% |
| Operating Income | $395.50M$323.20M | +22.4% |
| Net Income | $263.00M$212.10M | +24.0% |
| EPS (Basic) | $2.20$1.74 | +26.4% |
| EPS (Diluted) | $2.12$1.69 | +25.4% |
| Shares Outstanding (Basic) | 119.60M121.90M | −1.9% |
| Shares Outstanding (Diluted) | 124.10M125.40M | −1.0% |
05—Questions
Frequently Asked Questions
How did Broadridge perform financially in fiscal 2014?
Revenues increased $127.2 million, or 5%, to $2,558.0 million. Earnings from continuing operations before income taxes increased 22% to $395.5 million, and net earnings from continuing operations increased 24% to $263.0 million, or $2.12 per diluted share.
Which business segment drove results?
Investor Communication Solutions generated revenues of $1,866.9 million, up 6%, and pre-tax earnings of $336.0 million, up 11%. Securities Processing Solutions generated revenues of $694.8 million, up 5%, and pre-tax earnings of $119.1 million, up 40%, as its margin rose to 17.1%.
How is Broadridge's debt position and capital return?
The company had $524.1 million of long-term debt at June 30, 2014, consisting of $124.6 million of 6.125% notes due 2017 and $399.5 million of 3.95% notes due 2020. Dividends paid totaled $96.7 million and treasury stock purchases were $129.7 million during fiscal 2014.
What client concentration risk does the filing disclose?
In fiscal 2014 the company derived approximately 25% of consolidated revenues from five clients, and its largest single client accounted for approximately 5% of consolidated revenues. The filing states that losing these clients could have a material adverse effect on revenues.
Does the business have seasonal patterns?
Yes. The company processes and distributes the greatest number of proxy materials and annual reports in its fourth fiscal quarter, so revenues, operating income, net earnings and operating cash flows are historically highest in that quarter.
06—Continue