in predictably boring fashion, PAYX once again 'surprises' by one shiny copper piece.
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Paychex, Inc. Reports Record Second Quarter Results
Business Wire - December 16, 1999 08:11
ROCHESTER, N.Y.--(BUSINESS WIRE)--Dec. 16, 1999--Paychex, Inc. (NASDAQ: PAYX) today announced record net income of $45.8 million or $.18 diluted earnings per share for the second quarter ended November 30, 1999, a 36% increase over net income of $33.6 million or $.14 diluted earnings per share for the same period last year. Total service revenues were $172.4 million, an increase of 21% over $142.9 million for the second quarter last year.
For the six months ended November 30, 1999, net income increased 37% to $88.8 million or $.36 diluted earnings per share as compared to net income of $65.0 million or $.26 diluted earnings per share for the same period last year. Total service revenues were $338.8 million, an increase of 20% over $282.2 million for the same period last year.
PAYROLL SEGMENT
For the second quarter ended November 30, 1999, operating income for the Payroll segment increased 27% to $72.2 million from $56.7 million for the same period last year. Payroll service revenue was $154.9 million, an increase of 18% over $131.0 million for the second quarter last year.
For the six months ended November 30, 1999, operating income from Payroll services increased 30% to $143.9 million from $110.6 million for the same period last year. Payroll service revenue was $305.8 million, an increase of 18% over $259.0 million for the same period last year.
The increases in service revenue and operating income were primarily the result of a 10% year-over-year increase in the Payroll client base and continued growth of our ancillary services, Taxpay(R) and Flexible Pay Package. Paychex currently services 337,900 Payroll clients, with 269,300 utilizing Taxpay, the Company's tax filing and payment feature, and 147,800 taking advantage of the Company's Flexible Pay Package, which includes Direct Deposit, Readychex, and Access Card.
HRS-PEO SEGMENT
For the second quarter ended November 30, 1999, operating income for the HRS-PEO segment increased 138% from $2.6 million to $6.1 million. HRS-PEO service revenue was $17.5 million, an increase of 47% over $11.9 million for the second quarter last year.
For the six months ended November 30, 1999, operating income for the HRS-PEO segment increased 113% from $5.2 million to $11.1 million. HRS-PEO service revenue was $32.9 million, an increase of 42% over $23.2 million for the same period last year.
The increases in service revenue and operating income are primarily related to increasing 401(k) recordkeeping, Section 125 and Workers' compensation insurance clients. As of November 30, 1999, 6,800 clients have taken advantage of the Workers' compensation insurance product, since its national rollout in the first quarter of fiscal 1999. As of November 30, 1999, the segment serviced 12,400 401(k) recordkeeping clients, and 22,300 Section 125 administration plans, representing 55% and 23% year-over-year increases in these client bases, respectively.
CORPORATE EXPENSES
Corporate expenses are primarily related to the Information Technology, Organizational Development, Finance, Marketing and Senior Management functions of the Company. For the second quarter ended November 30, 1999, Corporate expenses increased 11% from $14.3 million to $15.8 million. For the six months ended November 30, 1999, Corporate expenses increased 16% from $29.1 million to $33.8 million. The increases are primarily due to additional employees and other expenditures to support the continued growth of the Company. Full-year fiscal 2000's Corporate expenses are expected to increase at a rate lower than 1999's growth rate of 16%.
B. Thomas Golisano, Chairman, President, and Chief Executive Officer of Paychex said, "We are very pleased with our year-to-date results for fiscal 2000. We are in the process of expanding our Major Market Services payroll product offering to include thirty cities that are currently serviced by our core payroll product. We reached another milestone as 401(k) client funds managed externally exceeded a billion dollars during the quarter. We are looking forward to the arrival of the next millennium, delivering the quality service our clients rely on, and executing our growth objectives." |
