Skip to content
AnalystLens

Paychex Annual Report, Year Ended May 31, 2001

Filing Date
Filed August 24, 2001
Period End
May 31, 2001
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 24, 2001. Cited figures are marked; the original filing is the authoritative source.

Paychex, Inc. filed its Form 10-K for the fiscal year ended May 31, 2001, describing itself as a leading national provider of comprehensive payroll, human resource and employee benefit outsourcing solutions for small- to medium-sized businesses, serving over 375,000 clients with 7,300 employees.

Fiscal 2001 total revenues rose 19.5% to $869.9 milliona, operating income grew 30.1% to $336.7 million, and net income increased 34.1% to $254.9 million, or $.68 per diluted share. The company marked its eleventh consecutive year of record service revenues and net income and its tenth consecutive year of net income growth of 30% or more. The balance sheet remained conservative, with no debt outstanding, corporate cash and investments of $614 million, and cash flow from operations of $304.9 million.

Dividends paid rose to $123.1 millionb, reflecting a 50% increase in the quarterly dividend rate, and return on stockholders' equity was 37.9%. Revenue from interest on funds held for clients rose 41.7% to $83.3 million, benefiting from higher rates and realized gains, but management stated that falling Federal Funds rates (down 2.50 percentage points during the third and fourth quarters) will reduce interest income in fiscal 2002.

Management guided for fiscal 2002 total revenue growth of 16%c to 18%, with effective income tax rate expected near 31.0% and interest-related earnings expected to grow more slowly. Growth drivers highlighted include the Paychex Administrative Services bundled product, which was made available nationwide in May 2000, Major Market Services payroll, 401(k) recordkeeping, and Internet-based services.

02—Key points

Key Highlights

  1. Total revenues increased 19.5% to $869.9 million in fiscal 2001, from $728.1 million in fiscal 2000.
  2. Operating income rose 30.1% to $336.7 million, with operating margin of 38.7% versus 35.6% a year earlier.
  3. Net income grew 34.1% to $254.9 million; diluted EPS was $.68 versus $.51.
  4. Corporate cash and investments reached $614 million, with no outstanding notes or mortgages and cash flow from operations of $304.9 million.
  5. Client utilization of Taxpay reached 83% and Employee Pay Services reached 53%, up from 47% in 2000.
  6. Interest on funds held for clients increased 41.7% to $83.3 million, but management expects it to decline in fiscal 2002 due to lower interest rates.
  7. Management expects fiscal 2002 total revenue growth of 16% to 18% and an effective tax rate near 31.0%.

03—Questions

Frequently Asked Questions

  1. How did Paychex perform financially in fiscal 2001?

    Paychex reported total revenues of $869.9 million, up 19.5%, operating income of $336.7 million, up 30.1%, and net income of $254.9 million, up 34.1%. Diluted earnings per share were $.68, compared with $.51 in fiscal 2000.

  2. What services does Paychex provide?

    Paychex provides payroll processing, Taxpay tax filing and payment, Employee Pay Services, and human resource and benefits products including 401(k) recordkeeping, workers' compensation administration, Section 125 plan administration, Paychex Administrative Services, and a professional employer organization. Its target market is small- to medium-sized businesses, and it serves over 375,000 clients.

  3. Is Paychex carrying significant debt?

    No. The filing states the company has no outstanding notes or mortgages and reports total debt of zero for 2001 and 2000. At May 31, 2001, it had $140 million of uncommitted unsecured credit lines and a $350 million uncommitted secured line, with no amounts outstanding.

  4. What does the company expect for fiscal 2002?

    Management expects total revenue growth of 16% to 18%, Payroll service revenue growth of 16% to 18%, and corporate expense growth of 10% to 13%. It also expects interest on funds held for clients and investment income to grow more slowly or decline because of lower interest rates, and an effective tax rate near 31.0%.

  5. How are interest rate changes affecting Paychex?

    The Federal Funds rate fell from 6.50% to 4.00% during fiscal 2001, and management expects this to reduce interest earnings in fiscal 2002. The filing estimates that a 25-basis-point change in rates would affect fiscal 2002 earnings by approximately $3.0 million.

04—Continue

← View all 10-K filings