Skip to content
AnalystLens

Paychex Annual Report, Year Ended May 31, 2000

Filing Date
Filed August 28, 2000
Period End
May 31, 2000
Security
PAYX
In the record · 2016–202610-K1110-Q328-K99

PAYX filed 11 annual reports (10-K), 32 quarterly reports (10-Q) and 99 current reports (8-K) between 2016 and 2026.

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

01—Abstract

Summary

Summary of the 10-K filed August 28, 2000. Cited figures are marked; the original filing is the authoritative source.

Paychex, Inc. reported record results for the fiscal year ended May 31, 2000, marking the tenth consecutive year of record service revenues and net income.

Service revenues rose 21.9% to $728.1 milliona, operating income increased 38.0% to $258.9 million, and net income grew 36.6% to $190.0 million, or $.51 per diluted share. Operating margin expanded to 35.6% from 31.4%, and net income was 26.1% of service revenues. Results were driven by growth in payroll clients, which reached 351,900, and by increased use of ancillary services such as Taxpay, where 81% of payroll clients participated, and Employee Pay Services, used by 47%.

The Payroll segment generated $653.2 millionb in service revenue and $303.4 million in operating income, with a 46.4% operating margin. Investment revenue earned on ENS investments, which hold client tax and payroll funds, was $58.8 million and is included in Payroll service revenue. The HRS-PEO segment grew service revenue 43.9% to $74.9 million and operating income 111.3% to $23.4 million.

Management expects fiscal 2001 Payroll revenue growth toward the upper end of an 18% to 20% range. The balance sheet remained conservative, with total assets of $2.46 billionc, stockholders' equity of $563.4 million, and no debt outstanding.

Cash and investments totaled $459 milliond, and operating cash flow was $249.0 million. The company paid cash dividends of $.22 per share and completed a three-for-two stock split in May 2000.

02—Key points

Key Highlights

  1. Service revenues of $728.1 million, up 21.9%; net income of $190.0 million, up 36.6%; diluted EPS of $.51
  2. Operating income of $258.9 million, up 38.0%, with operating margin rising to 35.6% from 31.4%
  3. Payroll segment operating income of $303.4 million on $653.2 million of service revenue, with a 46.4% operating margin
  4. HRS-PEO segment service revenue up 43.9% to $74.9 million; operating income up 111.3% to $23.4 million
  5. Payroll clients grew to 351,900 and 401(k) recordkeeping clients to 14,700, up 45.5% for the year
  6. No outstanding debt; cash and investments of $459 million; operating cash flow of $249.0 million
  7. Cash dividends of $.22 per share, up from $.15, following a three-for-two stock split in May 2000

03—Questions

Frequently Asked Questions

  1. What drove Paychex's revenue and profit growth in fiscal 2000?

    Growth came from adding new payroll clients, introducing new services, implementing price increases, and increasing client use of ancillary services such as Taxpay and Employee Pay Services. Taxpay utilization reached 81% of payroll clients and Employee Pay Services reached 47%. Major Market Services, which expanded to 44 markets, generated approximately $30 million in revenue.

  2. How much of Paychex's payroll revenue comes from investment income on client funds?

    ENS investment revenue, earned on client tax and payroll funds held before remittance, was $58.8 million in fiscal 2000 and is included in Payroll service revenue. The filing notes that average daily ENS investment balances were approximately $1.4 billion and that the segment realized losses of $2.9 million on these investments in the year.

  3. What is the company's financial position and capital strength?

    At May 31, 2000, total assets were $2.46 billion and stockholders' equity was $563.4 million. The company had no outstanding debt and held $459 million in available cash and investments. It also had $140 million in uncommitted unsecured lines of credit and a $350 million uncommitted secured line of credit.

  4. What risks and sensitivities does the filing disclose for investors?

    Available-for-sale securities of $984.3 million had a weighted-average yield of 4.5%. A hypothetical 25 basis point rise in interest rates would reduce their fair value by approximately $6.0 million, with the effect recorded in stockholders' equity. The filing also identifies competition, changes in payroll and benefit regulation, and technology changes as forward-looking risk factors.

  5. What outlook did management provide for fiscal 2001?

    Management expects Payroll revenue growth toward the upper end of an 18% to 20% range. HRS-PEO revenue and operating income are expected to grow more slowly than in fiscal 2000 but much faster than the Payroll segment. Corporate expenses are expected to grow at a slower rate, and purchases of property and equipment are expected to range from $30 million to $35 million.

04—Continue

← View all 10-K filings