ahhto!
wavplace.com
god bless you.
btw, if you missed Golisano's appearance on the idiot box, you can tune in at the link below.
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CNBC - POWER LUNCH
INTERVIEW WITH PAYCHEX CHAIRMAN AND CEO THOMAS GOLISANO
DECEMBER 16, 1999
mktnews.nasdaq.com\\www\nasdaq\news\msnbc\1999\12\16\NASDAQ_1230_27493.htm&site=NASDAQ&usymbol=PAYX&logo=&companyname=
SUMMARY: Golisano comments on the pros and cons of the tight labor market on the company. Golisano discusses Paychex's competition in the payroll business.
Bill: The nation's second-largest payroll-accounting firm reporting record results for its second quarter. Earlier today Paychex posted second-quarter profits of 18 cents a share, or one cent above Wall Street estimates. Revenue was up 21% to $172 million, while net income was up 36% to $46 million. Paychex is a leading provider of 401(k) record-keeping services to small businesses. Here to talk earnings and strategy Chairman and CEO Thomas Golisano, joining us from Rochester, New York this afternoon.
Hello, how are you.
Bill: I am doing fine. This must be a sweet spot for you. You founded the company back in early 70s, but right now with the tight labor market I would think this is good time to be in your business.
Well, it is a double-edged sword for Paychex, the tight labor market makes us stay with growth.
Bill: Tough to find good help.
On the other side, I think it is an ideal situation for smaller companies to consider outsourcing and obviously payroll one of those things it is very easy to do very and a very likely candidate. That's one reason our company entire industry continues to do well. We have 340,000 clients now that we serve around the country and average size company has about 14 employees.
Bill: You want to grow at how much each year? Your target is what?
Our revenue growth we like to see generate somewhere between 17 and 19 or 20% in revenue. We have consistently I think it is 34 quarters where earnings growth has been over 35%. At the same time, we like to grow customer base a little over 10%, maybe 11%. The thing that's different about us today than was maybe five or ten years ago we are selling so many services to the same customer. And that generates that larger revenue growth.
Bill: If this is as good as it gets, as far as economy goes how much longer can you maintain growth rate.
We have been through some slow times in our economy for example 1989, 1990. It didn't seem to affect our ability to sell new clients or retain new clients. It did affect a little bit a number of checks or number of employees paid per client then what down about three percent. That's been about the most serious impact that we have seen in our business.
Bill: What's the average size of your clients?
Average size is about 14.1 employees.
Bill: Is that where the greatest growth is for you, to find the smaller companies?
I think so. With 340,000 clients, there are about five and a half million businesses in the markets we serve. And that's only about a six percent penetration. If you combine all payroll processors together, we have less than 15% of the entire market. So, we think there is a great future.
Bill: How far behind are you behind ADP in terms of market share. I can't imagine you are happy being number two.
I think considering the fact we started 25 years later than they did, we can't discount the fact that ADP had a tremendous growth record in the history. And they are pioneer in our industry and real role model for us. I think they have somewhere over 425 or 430,000 clients. The major difference between two companies their average [sic] much higher than ours and they have really directed their effort what we call mid market 50 to 1,000 employees and Paychex kinds of comes in underneath that and both of us have been successful.
Bill: I have to ask you. I mean, it is no secret that you are the heart and soul of this company, the driving force. But it is also know secret you have a political ambition, have for years. You ran for governor one time. How much longer will you be Paychex? I know you love the company and you have a wonderful stake in it and a great past and so forth. But I can't imagine if you got other ambitions that you are going to be there much longer.
You are right. I did run for Governor twice in 1994 and 1998. I think the likelihood of that happening again is probably low. If it does happen again, I must remind ourselves we have great management team at Paychex during my previous campaigns. Our management team executed flawlessly. It is like they didn't need me and that's a great situation for me to be in. But I think the likelihood of me running begin is less than 50/50. I am not concerned about it. Three years from now I am having a lot of fun and why not with these numbers.
Bill: Thank you for joining us.
Thank you.
Bill: Thomas Golisano, the Chairman and CEO of Paychex, joining us from Rochester, New York today. And looking at a one-year stock chart of the company down 13/16 at 39 7/16. |
