05/04/2021 | Press release | Distributed by Public on 05/04/2021 05:06
NEW YORK, May 4, 2021 /PRNewswire/ -- Broadridge Financial Solutions, Inc. (NYSE: BR) today reported financial results for the third quarter and nine months ended March 31, 2021 of its fiscal year 2021. Results compared with the same period last year were as follows:
Summary Financial Results |
Third Quarter |
Nine Months |
||||||||||||
Dollars in millions, except per share data |
2021 |
2020 |
Change |
2021 |
2020 |
Change |
||||||||
Recurring fee revenues |
$900 |
$835 |
8% |
$2,267 |
$2,106 |
8% |
||||||||
Total revenues |
$1,390 |
$1,250 |
11% |
$3,462 |
$3,167 |
9% |
||||||||
Operating income |
239 |
226 |
6% |
397 |
326 |
22% |
||||||||
Operating income margin |
17.2% |
18.1% |
11.5% |
10.3% |
||||||||||
Adjusted Operating income - Non-GAAP |
284 |
262 |
8% |
553 |
460 |
20% |
||||||||
Adjusted Operating income margin - Non- |
20.4% |
21.0% |
16.0% |
14.5% |
||||||||||
Diluted EPS |
$1.40 |
$1.43 |
(2)% |
$2.44 |
$1.99 |
23% |
||||||||
Adjusted EPS - Non-GAAP |
$1.76 |
$1.67 |
5% |
$3.47 |
$2.88 |
20% |
||||||||
Closed sales |
$46 |
$44 |
3% |
$124 |
$127 |
(2)% |
'Broadridge delivered strong third quarter results, including 8% recurring revenue growth and 8% Adjusted Operating income growth,' said Tim Gokey, Broadridge's Chief Executive Officer.
'Our results continue to be propelled by powerful long-term trends including increased digitization, mutualization, and the democratization of investing. As a result, we continue to invest in our products and technology platforms. These investments, along with the pending acquisition of Itiviti, will further strengthen our ability to drive increased value to our clients and growth to our shareholders,' Mr. Gokey continued.
'Based on our strong performance, we are raising our top- and bottom-line growth guidance for fiscal year 2021 and now expect recurring revenue growth of 8-10% and Adjusted EPS growth of 11-13%. Looking beyond fiscal year 2021, Broadridge is well-positioned for continued growth, and we remain confident in our ability to deliver at the higher end of our three-year growth objectives,' Mr. Gokey concluded.
Fiscal Year 2021 Financial Guidance
FY'21 Guidance |
Updates / Changes |
||||
Recurring revenue growth |
8 - 10% |
Raised from higher end of 3-6% |
|||
Total revenue growth |
8 - 10% |
Raised from higher end of 1-4% |
|||
Adjusted Operating income margin - Non-GAAP |
~18% |
No change |
|||
Adjusted earnings per share growth - Non-GAAP |
11 - 13% |
Raised from higher end of 6-10% |
|||
Closed sales |
$190 - 235M |
No change |
Financial Results for the Third Quarter Fiscal Year 2021 compared to Third Quarter Fiscal Year 2020
Segment and Other Results for the Third Quarter Fiscal Year 2021 compared to Third Quarter Fiscal Year 2020
Investor Communication Solutions ('ICS')
Global Technology and Operations ('GTO')
Other
Financial Results for the Nine Months Fiscal Year 2021 compared to the Nine Months Fiscal Year 2020
Segment and Other Results for the Nine Months Fiscal Year 2021 compared to the Nine Months Fiscal Year 2020
ICS
GTO
Other
Pending Acquisition of Itiviti
In March 2021, the Company signed a definitive agreement to acquire 100% of the equity shares of Itiviti. The total purchase price is approximately $2.5 billion in cash, subject to normal closing adjustments. The acquisition is subject to customary closing conditions and regulatory approval and is expected to close in the fourth quarter of fiscal year 2021. The results of operations of the acquired business will be included in the results of operations of the Global Technology and Operations segment.
Earnings Conference Call
An analyst conference call will be held today, May 4, 2021 at 8:30 a.m. ET. A live webcast of the call will be available to the public on a listen-only basis. To listen to the live event and access the slide presentation, visit Broadridge's Investor Relations website at www.broadridge-ir.com prior to the start of the webcast. To listen to the call, investors may also dial 1-877-328-2502 within the United States and international callers may dial 1-412-317-5419.
A replay of the webcast will be available and can be accessed in the same manner as the live webcast at the Broadridge Investor Relations site. Through May 18, 2021, the recording will also be available by dialing 1-877-344-7529 passcode: 10155380 within the United States or 1-412-317-0088 passcode: 10155380 for international callers.
Explanation and Reconciliation of the Company's Use of Non-GAAP Financial Measures
The Company's results in this press release are presented in accordance with U.S. GAAP except where otherwise noted. In certain circumstances, results have been presented that are not generally accepted accounting principles measures ('Non-GAAP'). These Non-GAAP measures are Adjusted Operating income, Adjusted Operating income margin, Adjusted Net earnings, Adjusted earnings per share, and Free cash flow. These Non-GAAP financial measures should be viewed in addition to, and not as a substitute for, the Company's reported results.
The Company believes our Non-GAAP financial measures help investors understand how management plans, measures and evaluates the Company's business performance. Management believes that Non-GAAP measures provide consistency in its financial reporting and facilitates investors' understanding of the Company's operating results and trends by providing an additional basis for comparison. Management uses these Non-GAAP financial measures to, among other things, evaluate our ongoing operations, and for internal planning and forecasting purposes. In addition, and as a consequence of the importance of these Non-GAAP financial measures in managing our business, the Company's Compensation Committee of the Board of Directors incorporates Non-GAAP financial measures in the evaluation process for determining management compensation.
Adjusted Operating Income, Adjusted Operating Income Margin, Adjusted Net Earnings and Adjusted Earnings Per Share
These Non-GAAP measures reflect Operating income, Operating income margin, Net earnings, and Diluted earnings per share, each as adjusted to exclude the impact of certain costs, expenses, gains and losses and other specified items the exclusion of which management believes provides insight regarding our ongoing operating performance. Depending on the period presented, these adjusted measures exclude the impact of certain of the following items: (i) Amortization of Acquired Intangibles and Purchased Intellectual Property, (ii) Acquisition and Integration Costs, (iii) IBM Private Cloud Charges, (iv) Real Estate Realignment and Covid-19 Related Expenses, (v) Investment Gain, (vi) Software Charge and (vii) Loss on Acquisition-Related Financial Instrument. Amortization of Acquired Intangibles and Purchased Intellectual Property represents non-cash amortization expenses associated with the Company's acquisition activities. Acquisition and Integration Costs represent certain transaction and integration costs associated with the Company's acquisition activities. IBM Private Cloud Charges represent a charge on the hardware assets transferred to IBM and other charges related to the IBM Private Cloud Agreement. Real Estate Realignment and Covid-19 Related Expenses represent costs associated with the Company's real estate realignment initiative, including lease exit and impairment charges and other facility exit costs, as well as certain expenses associated with the Covid-19 pandemic. The Covid-19 Related Expenses are direct expenses incurred by the Company to protect the health and safety of Broadridge associates, including the cost of personal protective equipment, enhanced cleaning measures in our facilities and other safety related expenses. Investment Gain represents a non-operating, non-cash gain on a privately held investment. Software Charge represents a charge related to an internal use software product that is no longer expected to be used. Loss on Acquisition-Related Financial Instrument represents a non-operating loss on a financial instrument designed to minimize the Company's foreign exchange risk associated with the pending acquisition of Itiviti.
We exclude Acquisition and Integration Costs, IBM Private Cloud Charges, Real Estate Realignment and Covid-19 Related Expenses, the Investment Gain, the Software Charge and the Loss on Acquisition-Related Financial Instrument from our Adjusted Operating income (as applicable) and other adjusted earnings measures because excluding such information provides us with an understanding of the results from the primary operations of our business and enhances comparability across fiscal reporting periods, as these items are not reflective of our underlying operations or performance. We also exclude the impact of Amortization of Acquired Intangibles and Purchased Intellectual Property, as these non-cash amounts are significantly impacted by the timing and size of individual acquisitions and do not factor into the Company's capital allocation decisions, management compensation metrics or multi-year objectives. Furthermore, management believes that this adjustment enables better comparison of our results as Amortization of Acquired Intangibles and Purchased Intellectual Property will not recur in future periods once such intangible assets have been fully amortized. Although we exclude Amortization of Acquired Intangibles and Purchased Intellectual Property from our adjusted earnings measures, our management believes that it is important for investors to understand that these intangible assets contribute to revenue generation. Amortization of intangible assets that relate to past acquisitions will recur in future periods until such intangible assets have been fully amortized. Any future acquisitions may result in the amortization of additional intangible assets.
Free Cash Flow
In addition to the Non-GAAP financial measures discussed above, we provide Free cash flow information because we consider Free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated that could be used for dividends, share repurchases, strategic acquisitions, other investments, as well as debt servicing. Free cash flow is a Non-GAAP financial measure and is defined by the Company as Net cash flows provided by operating activities plus Proceeds from asset sales, less Capital expenditures as well as Software purchases and capitalized internal use software.
Reconciliations of such Non-GAAP measures to the most directly comparable financial measures presented in accordance with GAAP can be found in the tables that are part of this press release.
Forward-Looking Statements
This press release and other written or oral statements made from time to time by representatives of Broadridge may contain 'forward-looking statements' within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that are not historical in nature, and which may be identified by the use of words such as 'expects,' 'assumes,' 'projects,' 'anticipates,' 'estimates,' 'we believe,' 'could be' and other words of similar meaning, are forward-looking statements. In particular, information appearing in the 'Fiscal Year 2021 Financial Guidance' section and statements about our three-year objectives are forward-looking statements.
These statements are based on management's expectations and assumptions and are subject to risks and uncertainties that may cause actual results to differ materially from those expressed. These risks and uncertainties include those risk factors described and discussed in Part I, 'Item 1A. Risk Factors' of our Annual Report on Form 10-K for the year ended June 30, 2020 (the '2020 Annual Report'), as they may be updated in any future reports filed with the Securities and Exchange Commission. All forward-looking statements speak only as of the date of this press release and are expressly qualified in their entirety by reference to the factors discussed in the 2020 Annual Report.
These risks include:
Factors related to the Itiviti acquisition (as defined below) discussed in this press release that could cause actual results to differ materially from those contemplated by the forward-looking statements include:
Broadridge disclaims any obligation to update or revise forward-looking statements that may be made to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events, other than as required by law.
About Broadridge
Broadridge Financial Solutions (NYSE: BR), a global Fintech leader with over $4.5 billion in revenues, provides the critical infrastructure that powers investing, corporate governance and communications to enable better financial lives. We deliver technology-driven solutions to banks, broker-dealers, asset and wealth managers and public companies. Broadridge's infrastructure serves as a global communications hub enabling corporate governance by linking thousands of public companies and mutual funds to tens of millions of individual and institutional investors around the world. In addition, Broadridge's technology and operations platforms underpin the daily trading of on average more than U.S. $10 trillion of equities, fixed income and other securities globally. A certified Great Place to Work®, Broadridge is a part of the S&P 500® Index, employing over 12,000 associates in 17 countries.
For more information about Broadridge, please visit www.broadridge.com.
Contact Information
Investors: |
Media: |
W. Edings Thibault |
Gregg Rosenberg |
(516) 472-5129 |
(212) 918-6966 |
Condensed Consolidated Statements of Earnings (Unaudited) |
|||||||||||||||||
In millions, except per share amounts |
Three Months Ended March 31, |
Nine Months Ended March 31, |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
||||||||||||||
Revenues |
$ |
1,389.8 |
$ |
1,249.9 |
$ |
3,462.1 |
$ |
3,167.1 |
|||||||||
Operating expenses: |
|||||||||||||||||
Cost of revenues |
960.5 |
872.5 |
2,554.1 |
2,380.9 |
|||||||||||||
Selling, general and administrative expenses |
190.0 |
151.1 |
510.8 |
460.1 |
|||||||||||||
Total operating expenses |
1,150.6 |
1,023.7 |
3,064.8 |
2,841.0 |
|||||||||||||
Operating income |
239.2 |
226.3 |
397.3 |
326.1 |
|||||||||||||
Interest expense, net |
(11.8) |
(16.2) |
(37.3) |
(43.2) |
|||||||||||||
Other non-operating income (expenses), net |
(10.6) |
0.4 |
(0.1) |
1.8 |
|||||||||||||
Earnings before income taxes |
216.9 |
210.5 |
359.8 |
284.8 |
|||||||||||||
Provision for income taxes |
51.9 |
43.6 |
72.7 |
52.0 |
|||||||||||||
Net earnings |
$ |
165.0 |
$ |
166.8 |
$ |
287.1 |
$ |
232.8 |
|||||||||
Basic earnings per share |
$ |
1.42 |
$ |
1.46 |
$ |
2.48 |
$ |
2.03 |
|||||||||
Diluted earnings per share |
$ |
1.40 |
$ |
1.43 |
$ |
2.44 |
$ |
1.99 |
|||||||||
Weighted-average shares outstanding: |
|||||||||||||||||
Basic |
115.8 |
114.6 |
115.6 |
114.6 |
|||||||||||||
Diluted |
118.0 |
117.0 |
117.7 |
117.1 |
|||||||||||||
Amounts may not sum due to rounding. |
Condensed Consolidated Balance Sheets (Unaudited) |
|||||||||
In millions, except per share amounts |
March 31, |
June 30, |
|||||||
Assets |
|||||||||
Current assets: |
|||||||||
Cash and cash equivalents |
$ |
355.8 |
$ |
476.6 |
|||||
Accounts receivable, net of allowance for doubtful accounts of |
871.0 |
711.3 |
|||||||
Other current assets |
151.8 |
140.1 |
|||||||
Total current assets |
1,378.6 |
1,328.0 |
|||||||
Property, plant and equipment, net |
167.2 |
161.6 |
|||||||
Goodwill |
1,723.3 |
1,674.5 |
|||||||
Intangible assets, net |
546.8 |
583.8 |
|||||||
Other non-current assets |
1,370.9 |
1,141.9 |
|||||||
Total assets |
$ |
5,186.8 |
$ |
4,889.8 |
|||||
Liabilities and Stockholders' Equity |
|||||||||
Current liabilities: |
|||||||||
Current portion of long-term debt |
$ |
- |
$ |
399.9 |
|||||
Payables and accrued expenses |
876.1 |
829.9 |
|||||||
Contract liabilities |
126.5 |
111.2 |
|||||||
Total current liabilities |
1,002.6 |
1,341.0 |
|||||||
Long-term debt |
1,737.7 |
1,387.6 |
|||||||
Deferred taxes |
157.4 |
126.8 |
|||||||
Contract liabilities |
187.7 |
175.4 |
|||||||
Other non-current liabilities |
511.9 |
512.4 |
|||||||
Total liabilities |
3,597.4 |
3,543.2 |
|||||||
Commitments and contingencies |
|||||||||
Stockholders' equity: |
|||||||||
Preferred stock: Authorized, 25.0 shares; issued and outstanding, |
- |
- |
|||||||
Common stock, $0.01 par value: Authorized, 650.0 shares; |
1.6 |
1.6 |
|||||||
Additional paid-in capital |
1,241.2 |
1,178.5 |
|||||||
Retained earnings |
2,390.2 |
2,302.6 |
|||||||
Treasury stock, at cost: 38.6 and 39.3 shares, respectively |
(2,019.6) |
(2,035.7) |
|||||||
Accumulated other comprehensive loss |
(24.1) |
(100.4) |
|||||||
Total stockholders' equity |
1,589.3 |
1,346.5 |
|||||||
Total liabilities and stockholders' equity |
$ |
5,186.8 |
$ |
4,889.8 |
|||||
Amounts may not sum due to rounding. |
Condensed Consolidated Statements of Cash Flows (Unaudited) |
|||||||
Dollars in millions |
Nine Months Ended |
||||||
2021 |
2020 |
||||||
Cash Flows From Operating Activities |
|||||||
Net earnings |
$ |
287.1 |
$ |
232.8 |
|||
Adjustments to reconcile net earnings to net cash flows provided by operating |
|||||||
Depreciation and amortization |
47.6 |
56.5 |
|||||
Amortization of acquired intangibles and purchased intellectual property |
96.8 |
90.9 |
|||||
Amortization of other assets |
83.1 |
76.0 |
|||||
Write-down of long-lived assets and related charges |
34.7 |
32.1 |
|||||
Stock-based compensation expense |
46.4 |
47.6 |
|||||
Deferred income taxes |
24.2 |
9.7 |
|||||
Other |
(36.5) |
(16.0) |
|||||
Changes in operating assets and liabilities, net of assets and liabilities acquired: |
|||||||
Current assets and liabilities: |
|||||||
Increase in Accounts receivable, net |
(138.3) |
(142.7) |
|||||
Increase in Other current assets |
(21.7) |
(21.7) |
|||||
Increase (decrease) in Payables and accrued expenses |
1.6 |
(22.7) |
|||||
Increase in Contract liabilities |
12.7 |
18.2 |
|||||
Non-current assets and liabilities: |
|||||||
Increase in Other non-current assets |
(317.6) |
(244.7) |
|||||
Increase in Other non-current liabilities |
69.3 |
39.6 |
|||||
Net cash flows provided by operating activities |
189.5 |
155.6 |
|||||
Cash Flows From Investing Activities |
|||||||
Capital expenditures |
(41.5) |
(48.5) |
|||||
Software purchases and capitalized internal use software |
(29.7) |
(25.0) |
|||||
Proceeds from asset sales |
18.0 |
- |
|||||
Acquisitions, net of cash acquired |
- |
(339.1) |
|||||
Other investing activities |
(11.8) |
(15.3) |
|||||
Net cash flows used in investing activities |
(65.0) |
(427.9) |
|||||
Cash Flows From Financing Activities |
|||||||
Debt proceeds |
725.0 |
1,575.3 |
|||||
Debt repayments |
(780.6) |
(960.6) |
|||||
Dividends paid |
(195.1) |
(179.2) |
|||||
Purchases of Treasury stock |
(1.0) |
(50.5) |
|||||
Proceeds from exercise of stock options |
33.9 |
26.4 |
|||||
Other financing activities |
(37.3) |
(9.8) |
|||||
Net cash flows provided by (used in) financing activities |
(255.1) |
401.6 |
|||||
Effect of exchange rate changes on Cash and cash equivalents |
9.7 |
(0.4) |
|||||
Net change in Cash and cash equivalents |
(120.8) |
128.9 |
|||||
Cash and cash equivalents, beginning of period |
476.6 |
273.2 |
|||||
Cash and cash equivalents, end of period |
$ |
355.8 |
$ |
402.1 |
|||
Amounts may not sum due to rounding. |
Segment Results (Unaudited) |
|||||||||||||||
In millions |
Three Months Ended March 31, |
Nine Months Ended March 31, |
|||||||||||||
2021 |
2020 |
2021 |
2020 |
||||||||||||
Revenues |
|||||||||||||||
Investor Communication Solutions |
$ |
1,109.3 |
$ |
980.2 |
$ |
2,646.0 |
$ |
2,398.4 |
|||||||
Global Technology and Operations |
313.5 |
305.5 |
911.9 |
860.3 |
|||||||||||
Foreign currency exchange |
(33.1) |
(35.8) |
(95.8) |
(91.6) |
|||||||||||
Total |
$ |
1,389.8 |
$ |
1,249.9 |
$ |
3,462.1 |
$ |
3,167.1 |
|||||||
Earnings (Loss) before Income Taxes |
|||||||||||||||
Investor Communication Solutions |
$ |
219.0 |
$ |
159.2 |
$ |
314.1 |
$ |
204.3 |
|||||||
Global Technology and Operations |
61.7 |
67.4 |
192.0 |
172.9 |
|||||||||||
Other |
(66.8) |
(17.8) |
(159.2) |
(107.1) |
|||||||||||
Foreign currency exchange |
2.9 |
1.6 |
12.9 |
14.6 |
|||||||||||
Total |
$ |
216.9 |
$ |
210.5 |
$ |
359.8 |
$ |
284.8 |
|||||||
Pre-tax margins: |
|||||||||||||||
Investor Communication Solutions |
19.7 |
% |
16.2 |
% |
11.9 |
% |
8.5 |
% |
|||||||
Global Technology and Operations |
19.7 |
% |
22.1 |
% |
21.1 |
% |
20.1 |
% |
|||||||
Amounts may not sum due to rounding. |
Supplemental Reporting Detail - Additional Product Line Reporting (Unaudited) |
|||||||||||||||||||||
In millions |
Three Months Ended March 31, |
Nine Months Ended March 31, |
|||||||||||||||||||
Investor Communication Solutions |
2021 |
2020 |
Change |
2021 |
2020 |
Change |
|||||||||||||||
Regulatory1 |
$ |
289.6 |
$ |
241.5 |
20 |
% |
$ |
572.9 |
$ |
492.2 |
16 |
% |
|||||||||
Data-driven fund solutions1 |
89.6 |
88.9 |
1 |
% |
261.2 |
249.3 |
5 |
% |
|||||||||||||
Issuer1 |
44.3 |
34.6 |
28 |
% |
82.8 |
68.1 |
22 |
% |
|||||||||||||
Customer communications1 |
163.0 |
164.0 |
(1) |
% |
438.7 |
436.1 |
1 |
% |
|||||||||||||
Total ICS Recurring fee revenues |
586.5 |
529.0 |
11 |
% |
1,355.6 |
1,245.8 |
9 |
% |
|||||||||||||
Equity and other |
40.4 |
22.1 |
83 |
% |
79.5 |
54.9 |
45 |
% |
|||||||||||||
Mutual funds |
33.4 |
17.0 |
96 |
% |
85.0 |
55.3 |
54 |
% |
|||||||||||||
Total ICS Event-driven fee revenues |
73.8 |
39.1 |
89 |
% |
164.5 |
110.3 |
49 |
% |
|||||||||||||
Distribution revenues |
449.1 |
412.1 |
9 |
% |
1,126.0 |
1,042.4 |
8 |
% |
|||||||||||||
Total ICS Revenues |
$ |
1,109.3 |
$ |
980.2 |
13 |
% |
$ |
2,646.0 |
$ |
2,398.4 |
10 |
% |
|||||||||
Global Technology and Operations |
|||||||||||||||||||||
Capital markets1 |
$ |
167.3 |
$ |
169.2 |
(1) |
% |
$ |
499.4 |
$ |
479.5 |
4 |
% |
|||||||||
Wealth and investment management1 |
146.2 |
136.2 |
7 |
% |
412.4 |
380.8 |
8 |
% |
|||||||||||||
Total GTO Recurring fee revenues |
313.5 |
305.5 |
3 |
% |
911.9 |
860.3 |
6 |
% |
|||||||||||||
Foreign currency exchange |
(33.1) |
(35.8) |
(8) |
% |
(95.8) |
(91.6) |
5 |
% |
|||||||||||||
Total Revenues |
$ |
1,389.8 |
$ |
1,249.9 |
11 |
% |
$ |
3,462.1 |
$ |
3,167.1 |
9 |
% |
|||||||||
Revenues by Type |
|||||||||||||||||||||
Recurring fee revenues |
$ |
900.0 |
$ |
834.5 |
8 |
% |
$ |
2,267.5 |
$ |
2,106.1 |
8 |
% |
|||||||||
Event-driven fee revenues |
73.8 |
39.1 |
89 |
% |
164.5 |
110.3 |
49 |
% |
|||||||||||||
Distribution revenues |
449.1 |
412.1 |
9 |
% |
1,126.0 |
1,042.4 |
8 |
% |
|||||||||||||
Foreign currency exchange |
(33.1) |
(35.8) |
(8) |
% |
(95.8) |
(91.6) |
5 |
% |
|||||||||||||
Total Revenues |
$ |
1,389.8 |
$ |
1,249.9 |
11 |
% |
$ |
3,462.1 |
$ |
3,167.1 |
9 |
% |
|||||||||
Amounts may not sum due to rounding. |
|||||||||||||||||||||
1 In the second quarter of fiscal year 2021, the Company changed its presentation of disaggregated revenue by product line disclosures to reflect internal realignment of the Company's revenue reporting, specifically as it relates to Recurring fee revenues. Presentation of disaggregated revenue by product line disclosures in prior periods have been changed to conform to the current period presentation. |
Select Operating Metrics (Unaudited) |
|||||||||||
Three Months Ended March 31, |
Nine Months Ended |
||||||||||
In millions |
2021 |
2020 |
% |
2021 |
2020 |
% |
|||||
Closed sales1 |
$45.6 |
$44.4 |
3% |
$124.4 |
$127.1 |
(2)% |
|||||
Record Growth2 |
|||||||||||
Equity proxy |
20% |
7% |
20% |
8% |
|||||||
Mutual fund interims |
7% |
-% |
9% |
3% |
|||||||
Internal Trade Growth3 |
12% |
26% |
16% |
5% |
|||||||
Amounts may not sum due to rounding. |
|||||||||||
1Refer to the 'Results of Operations' section of Broadridge's Form 10-Q for a description of Closed sales and its calculation. |
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2Stock record growth and interim record growth measure the estimated annual change in total positions eligible for equity proxy materials and mutual fund & ETF interim communications, respectively, for equities and mutual fund position data reported to Broadridge in both the current and prior year periods. |
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3Internal trade growth represents the estimate change in trade volumes for clients whose contracts are linked to trade volumes and who were on Broadridge's trading platforms in both the current and prior year periods. |
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Reconciliation of Non-GAAP to GAAP Measures (Unaudited) |
|||||||||||
In millions, except per share amounts |
Three Months Ended March 31, |
Nine Months Ended March 31, |
|||||||||
2021 |
2020 |
2021 |
2020 |
||||||||
Reconciliation of Adjusted Operating Income |
|||||||||||
Operating income (GAAP) |
$ |
239.2 |
$ |
226.3 |
$ |
397.3 |
$ |
326.1 |
|||
Adjustments: |
|||||||||||
Amortization of Acquired Intangibles and Purchased |
31.9 |
32.5 |
96.8 |
90.9 |
|||||||
Acquisition and Integration Costs |
9.2 |
3.0 |
11.6 |
9.0 |
|||||||
IBM Private Cloud Charges |
- |
0.2 |
- |
33.6 |
|||||||
Real Estate Realignment and Covid-19 Related Expenses |
3.3 |
- |
41.1 |
- |
|||||||
Software Charge |
- |
- |
6.0 |
- |
|||||||
Adjusted Operating income (Non-GAAP) |
$ |
283.6 |
$ |
262.1 |
$ |
552.7 |
$ |
459.6 |
|||
Operating income margin (GAAP) |
17.2% |
18.1% |
11.5% |
10.3% |
|||||||
Adjusted Operating income margin (Non-GAAP) |
20.4% |
21.0% |
16.0% |
14.5% |
|||||||
Reconciliation of Adjusted Net earnings |
|||||||||||
Net earnings (GAAP) |
$ |
165.0 |
$ |
166.8 |
$ |
287.1 |
$ |
232.8 |
|||
Adjustments: |
|||||||||||
Amortization of Acquired Intangibles and Purchased |
31.9 |
32.5 |
96.8 |
90.9 |
|||||||
Acquisition and Integration Costs |
9.2 |
3.0 |
11.6 |
9.0 |
|||||||
IBM Private Cloud Charges |
- |
0.2 |
- |
33.6 |
|||||||
Real Estate Realignment and Covid-19 Related Expenses |
3.3 |
- |
41.1 |
- |
|||||||
Investment Gain |
- |
- |
(8.7) |
- |
|||||||
Software Charge |
- |
- |
6.0 |
- |
|||||||
Loss on Acquisition-Related Financial Instrument |
9.6 |
- |
9.6 |
- |
|||||||
Subtotal of adjustments |
54.0 |
35.8 |
156.3 |
133.5 |
|||||||
Tax impact of adjustments (a) |
(10.9) |
(7.6) |
(35.0) |
(29.0) |
|||||||
Adjusted Net earnings (Non-GAAP) |
$ |
208.1 |
$ |
195.0 |
$ |
408.4 |
$ |
337.3 |
|||
Reconciliation of Adjusted EPS |
|||||||||||
Diluted earnings per share (GAAP) |
$ |
1.40 |
$ |
1.43 |
$ |
2.44 |
$ |
1.99 |
|||
Adjustments: |
|||||||||||
Amortization of Acquired Intangibles and Purchased |
0.27 |
0.28 |
0.82 |
0.78 |
|||||||
Acquisition and Integration Costs |
0.08 |
0.03 |
0.10 |
0.08 |
|||||||
IBM Private Cloud Charges |
- |
- |
- |
0.29 |
|||||||
Real Estate Realignment and Covid-19 Related Expenses |
0.03 |
- |
0.35 |
- |
|||||||
Investment Gain |
- |
- |
(0.07) |
- |
|||||||
Software Charge |
- |
- |
0.05 |
- |
|||||||
Loss on Acquisition-Related Financial Instrument |
0.08 |
- |
0.08 |
- |
|||||||
Subtotal of adjustments |
0.46 |
0.31 |
1.33 |
1.14 |
|||||||
Tax impact of adjustments (a) |
(0.09) |
(0.07) |
(0.30) |
(0.25) |
|||||||
Adjusted earnings per share (Non-GAAP) |
$ |
1.76 |
$ |
1.67 |
$ |
3.47 |
$ |
2.88 |
|||
(a) Calculated using the GAAP effective tax rate, adjusted to exclude excess tax benefits associated with stock-based compensation of $1.7 million and $14.6 million for the three and nine months ended March 31, 2021, and $1.9 million and $9.9 million for the three and nine months ended March 31, 2020, respectively. For purposes of calculating the Adjusted earnings per share, the same adjustments were made on a per share basis. The tax impact of adjustments also excludes approximately $8.5 million of Acquisition and Integration Costs for the three and nine months ended March 31, 2021, which are not tax-deductible. For purposes of calculating the Adjusted earnings per share, the same adjustments were made on a per share basis. |
Nine Months Ended March 31, |
|||||||
2021 |
2020 |
||||||
Reconciliation of Free Cash Flow |
|||||||
Net cash flows provided by operating activities (GAAP) |
$ |
189.5 |
$ |
155.6 |
|||
Capital expenditures and Software purchases and capitalized internal use software |
(71.2) |
(73.5) |
|||||
Proceeds from asset sales |
18.0 |
- |
|||||
Free cash flow (Non-GAAP) |
$ |
136.3 |
$ |
82.2 |
|||
Amounts may not sum due to rounding. |
Fiscal Year 2021 Guidance Reconciliation of Non-GAAP to GAAP Measures Adjusted Earnings Per Share Growth and Adjusted Operating Income Margin (Unaudited) |
||
FY21 Adjusted Earnings Per Share Growth Rate (a) |
||
Diluted earnings per share - GAAP |
5 - 7% growth |
|
Adjusted earnings per share - Non-GAAP |
11 - 13% growth |
|
FY21 Adjusted Operating Income Margin (b) |
||
Operating income margin % - GAAP |
~14% |
|
Adjusted Operating income margin % - Non-GAAP |
~18% |
|
(a) Adjusted earnings per share growth (Non-GAAP) is adjusted to exclude the projected impact of Amortization of Acquired Intangibles and Purchased Intellectual Property, Acquisition and Integration Costs, Real Estate Realignment and Covid-19 Related Expenses, Investment Gain, Software Charge, and Loss on Acquisition-Related Financial Instrument, and is calculated using diluted shares outstanding. Fiscal year 2021 Non-GAAP Adjusted earnings per share guidance estimates exclude, net of taxes, approximately $1.45 per share. |
||
(b) Adjusted Operating income margin (Non-GAAP) is adjusted to exclude the projected impact of Amortization of Acquired Intangibles and Purchased Intellectual Property, Acquisition and Integration Costs, Real Estate Realignment and Covid-19 Related Expenses, and Software Charge. Fiscal year 2021 Non-GAAP Adjusted Operating income margin guidance estimates excludes approximately $215 million. |
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SOURCE Broadridge Financial Solutions, Inc.