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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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33-1151291
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(State or Other Jurisdiction of
Incorporation or Organization)
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(I.R.S. Employer
Identification No.)
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1981 Marcus Avenue
Lake Success, NY
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11042
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
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x
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Accelerated filer
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¨
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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ITEM
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PAGE
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PART I.
|
||
Item 1.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
PART II.
|
||
Item 1.
|
||
Item 1A.
|
||
Item 2.
|
||
Item 3.
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Item 4.
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Item 5.
|
||
Item 6.
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Item 1.
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FINANCIAL STATEMENTS
|
|
Three Months Ended
September 30, |
||||||
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2014
|
|
2013
|
||||
Revenues
|
$
|
555.8
|
|
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$
|
545.2
|
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Cost of revenues
|
406.5
|
|
|
397.5
|
|
||
Selling, general and administrative expenses
|
91.7
|
|
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73.5
|
|
||
Other expenses, net
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7.6
|
|
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4.9
|
|
||
Total expenses
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505.8
|
|
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475.9
|
|
||
Earnings before income taxes
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50.0
|
|
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69.3
|
|
||
Provision for income taxes
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17.5
|
|
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24.9
|
|
||
Net earnings
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$
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32.5
|
|
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$
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44.4
|
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Basic earnings per share
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$
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0.27
|
|
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$
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0.37
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Diluted earnings per share
|
$
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0.26
|
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$
|
0.36
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Weighted-average shares outstanding:
|
|
|
|
||||
Basic
|
119.8
|
|
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119.1
|
|
||
Diluted
|
123.9
|
|
|
123.1
|
|
||
Dividends declared per common share
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$
|
0.27
|
|
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$
|
0.21
|
|
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Three Months Ended
September 30, |
||||||
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2014
|
|
2013
|
||||
Net earnings
|
$
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32.5
|
|
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$
|
44.4
|
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Other comprehensive income (loss), net:
|
|
|
|
||||
Foreign currency translation adjustments
|
(4.5
|
)
|
|
(1.7
|
)
|
||
Net unrealized losses on available-for-sale securities, net of taxes of $0.0 for both the three months ended September 30, 2014 and 2013
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(0.1
|
)
|
|
(0.1
|
)
|
||
Pension and post-retirement liability adjustment, net of taxes of ($0.1) and $0.0 for the three months ended September 30, 2014 and 2013, respectively
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—
|
|
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0.1
|
|
||
Total other comprehensive income (loss), net
|
(4.6
|
)
|
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(1.7
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)
|
||
Comprehensive income
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$
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27.9
|
|
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$
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42.7
|
|
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September 30,
2014 |
|
June 30,
2014 |
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
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$
|
331.3
|
|
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$
|
347.6
|
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Accounts receivable, net of allowance for doubtful accounts of $2.9 and $3.3, respectively
|
361.1
|
|
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424.8
|
|
||
Other current assets
|
83.2
|
|
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108.2
|
|
||
Total current assets
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775.6
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|
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880.6
|
|
||
Property, plant and equipment, net
|
84.5
|
|
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88.3
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|
||
Goodwill
|
854.1
|
|
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856.1
|
|
||
Intangible assets, net
|
122.7
|
|
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130.0
|
|
||
Other non-current assets
|
241.7
|
|
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237.1
|
|
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Total assets
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$
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2,078.6
|
|
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$
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2,192.1
|
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Liabilities and Stockholders’ Equity
|
|
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|
||||
Current liabilities:
|
|
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|
||||
Accounts payable
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$
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108.9
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$
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116.3
|
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Accrued expenses and other current liabilities
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190.0
|
|
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306.6
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|
||
Deferred revenues
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65.1
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|
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61.5
|
|
||
Total current liabilities
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364.0
|
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484.4
|
|
||
Long-term debt
|
524.2
|
|
|
524.1
|
|
||
Deferred taxes
|
55.9
|
|
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62.4
|
|
||
Deferred revenues
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60.2
|
|
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59.0
|
|
||
Other non-current liabilities
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103.3
|
|
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100.5
|
|
||
Total liabilities
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1,107.6
|
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1,230.4
|
|
||
Commitments and contingencies (Note 11)
|
|
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|
||||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock: Authorized, 25.0 shares; issued and outstanding, none
|
—
|
|
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—
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|
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Common stock, $0.01 par value: Authorized, 650.0 shares; issued, 154.5 and 154.5 shares, respectively; outstanding, 120.0 and 119.5 shares, respectively
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1.6
|
|
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1.6
|
|
||
Additional paid-in capital
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821.1
|
|
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810.7
|
|
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Retained earnings
|
974.0
|
|
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973.9
|
|
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Treasury stock, at cost: 34.5 and 35.0 shares, respectively
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(831.4
|
)
|
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(834.8
|
)
|
||
Accumulated other comprehensive income
|
5.7
|
|
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10.3
|
|
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Total stockholders’ equity
|
971.0
|
|
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961.7
|
|
||
Total liabilities and stockholders’ equity
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$
|
2,078.6
|
|
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$
|
2,192.1
|
|
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Three Months Ended
September 30, |
||||||
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2014
|
|
2013
|
||||
Cash Flows From Operating Activities
|
|
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|
||||
Net earnings
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$
|
32.5
|
|
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$
|
44.4
|
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Adjustments to reconcile Net earnings to Net cash flows provided by (used in) operating activities:
|
|
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|
||||
Depreciation and amortization
|
12.0
|
|
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10.9
|
|
||
Amortization of acquired intangibles
|
5.8
|
|
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5.5
|
|
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Amortization of other assets
|
7.5
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6.6
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|
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Stock-based compensation expense
|
8.4
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4.8
|
|
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Deferred income taxes
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(5.2
|
)
|
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0.4
|
|
||
Excess tax benefits from the issuance of stock-based compensation awards
|
(5.2
|
)
|
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(1.0
|
)
|
||
Other
|
0.8
|
|
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(2.3
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Current assets and liabilities:
|
|
|
|
||||
Decrease in Accounts receivable, net
|
65.1
|
|
|
74.7
|
|
||
Decrease in Other current assets
|
23.3
|
|
|
0.9
|
|
||
Decrease in Accounts payable
|
(7.1
|
)
|
|
(32.2
|
)
|
||
Decrease in Accrued expenses and other current liabilities
|
(118.3
|
)
|
|
(115.5
|
)
|
||
Increase in Deferred revenues
|
3.0
|
|
|
1.2
|
|
||
Non-current assets and liabilities:
|
|
|
|
||||
Increase in Other non-current assets
|
(12.8
|
)
|
|
(9.9
|
)
|
||
Increase in Other non-current liabilities
|
7.3
|
|
|
6.1
|
|
||
Net cash flows provided by (used in) operating activities
|
17.1
|
|
|
(5.4
|
)
|
||
Cash Flows From Investing Activities
|
|
|
|
||||
Capital expenditures
|
(6.0
|
)
|
|
(10.5
|
)
|
||
Purchases of intangibles
|
(1.4
|
)
|
|
(2.8
|
)
|
||
Equity method investment
|
(1.8
|
)
|
|
—
|
|
||
Acquisitions, net of cash acquired
|
—
|
|
|
(37.7
|
)
|
||
Net cash flows used in investing activities
|
(9.2
|
)
|
|
(51.0
|
)
|
||
Cash Flows From Financing Activities
|
|
|
|
||||
Proceeds from issuance of bonds, net of discounts
|
—
|
|
|
399.5
|
|
||
Payments on Long-term debt
|
—
|
|
|
(400.0
|
)
|
||
Excess tax benefits from the issuance of stock-based compensation awards
|
5.2
|
|
|
1.0
|
|
||
Dividends paid
|
(25.2
|
)
|
|
(21.5
|
)
|
||
Purchases of Treasury stock
|
(15.1
|
)
|
|
(7.9
|
)
|
||
Proceeds from exercise of stock options
|
15.4
|
|
|
5.9
|
|
||
Costs related to amendment of revolving credit facility
|
(1.9
|
)
|
|
—
|
|
||
Costs related to issuance of bonds
|
—
|
|
|
(4.3
|
)
|
||
Net cash flows used in financing activities
|
(21.6
|
)
|
|
(27.3
|
)
|
||
Effect of exchange rate changes on Cash and cash equivalents
|
(2.6
|
)
|
|
0.8
|
|
||
Net change in Cash and cash equivalents
|
(16.3
|
)
|
|
(82.9
|
)
|
||
Cash and cash equivalents, beginning of period
|
347.6
|
|
|
266.0
|
|
||
Cash and cash equivalents, end of period
|
$
|
331.3
|
|
|
$
|
183.1
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
||||
Cash payments made for interest
|
$
|
7.9
|
|
|
$
|
1.1
|
|
Cash payments made for income taxes
|
$
|
32.2
|
|
|
$
|
51.2
|
|
Non-cash investing and financing activities:
|
|
|
|
||||
Dividends payable
|
$
|
7.2
|
|
|
$
|
3.1
|
|
Property, plant and equipment
|
$
|
0.3
|
|
|
$
|
0.1
|
|
•
|
Investor Communication Solutions
—The Bank/Broker-Dealer Investor Communication Solutions, Corporate Issuer Solutions and Mutual Fund and Retirement Solutions businesses operate within this segment. A large portion of Broadridge’s Investor Communication Solutions business involves the processing and distribution of proxy materials to investors in equity securities and mutual funds, as well as the facilitation of related vote processing. ProxyEdge
®
, Broadridge's innovative electronic proxy delivery and voting solution for institutional investors and financial advisors, helps ensure the participation of the largest stockholders of many companies. Broadridge also provides the distribution of regulatory reports and corporate action/reorganization event information, as well as tax reporting solutions that help its clients meet their regulatory compliance needs. In addition, Broadridge provides financial information distribution and transaction reporting services to both financial institutions and securities issuers. These services include the processing and distribution of account statements and trade confirmations, traditional and personalized document fulfillment and content management services, marketing communications, and imaging, archival and workflow solutions that enable and enhance Broadridge's clients’ communications with investors. All of these communications are delivered through paper or electronic channels. In addition, Broadridge provides corporate issuers with registered proxy services as well as registrar, stock transfer and record-keeping services.
|
•
|
Securities Processing Solutions
—Broadridge's Global Technology and Operations Solutions business operates within this segment and offers a suite of advanced computerized real-time transaction processing services that automate the securities transaction lifecycle, from desktop productivity tools, data aggregation, performance reporting, and portfolio management to order capture and execution, trade confirmation, settlement, and accounting. Broadridge's services help financial institutions efficiently and cost-effectively consolidate their books and records, gather and service assets under management, focus on their core businesses, and manage risk. With multi-currency capabilities, Broadridge's Global Processing Solution supports real-time global trading of equity, option, mutual fund, and fixed income securities in established and emerging markets. In addition, Broadridge's business process outsourcing services allow broker-dealers to outsource certain administrative functions relating to clearing and settlement, from order entry to trade matching and settlement, while maintaining their ability to finance and capitalize their businesses.
|
|
Three Months Ended
September 30, |
||||
|
2014
|
|
2013
|
||
Weighted-average shares outstanding:
|
|
|
|
||
Basic
|
119.8
|
|
|
119.1
|
|
Common stock equivalents
|
4.1
|
|
|
4.0
|
|
Diluted
|
123.9
|
|
|
123.1
|
|
|
Three Months Ended
September 30, |
||||||
|
2014
|
|
2013
|
||||
|
($ in millions)
|
||||||
Interest expense on borrowings
|
$
|
6.2
|
|
|
$
|
4.6
|
|
Interest income
|
(0.6
|
)
|
|
(0.2
|
)
|
||
Losses from equity method investments
|
1.5
|
|
|
—
|
|
||
Foreign currency exchange gain
|
—
|
|
|
(1.2
|
)
|
||
Other, net
|
0.5
|
|
|
1.7
|
|
||
Other expenses, net
|
$
|
7.6
|
|
|
$
|
4.9
|
|
Level 1
|
Inputs that are based upon unadjusted quoted prices for identical instruments traded in active markets. Level 1 assets for the Company includes a money market deposit account (“MMDA account”).
|
Level 2
|
Quoted prices in markets that are not considered to be active or financial instruments for which all significant inputs are observable, either directly or indirectly.
|
Level 3
|
Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
($ in millions)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Money market funds (1)
|
$
|
99.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
99.0
|
|
Other current assets:
|
|
|
|
|
|
|
|
||||||||
Available-for-sale equity securities
|
0.1
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
||||
Other non-current assets:
|
|
|
|
|
|
|
|
||||||||
Available-for-sale equity securities
|
22.8
|
|
|
—
|
|
|
1.1
|
|
|
23.9
|
|
||||
Total as of September 30, 2014
|
$
|
121.9
|
|
|
$
|
—
|
|
|
$
|
1.1
|
|
|
$
|
123.0
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
($ in millions)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Money market funds (1)
|
$
|
138.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
138.9
|
|
Other current assets:
|
|
|
|
|
|
|
|
||||||||
Available-for-sale equity securities
|
0.1
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
||||
Other non-current assets:
|
|
|
|
|
|
|
|
||||||||
Available-for-sale equity securities
|
19.8
|
|
|
—
|
|
|
1.1
|
|
|
20.9
|
|
||||
Total as of June 30, 2014
|
$
|
158.8
|
|
|
$
|
—
|
|
|
$
|
1.1
|
|
|
$
|
159.9
|
|
(1)
|
Money market funds include MMDA account balances of
$74.8 million
and
$71.6 million
as of
September 30, 2014
and
June 30, 2014
, respectively.
|
|
September 30,
2014 |
|
September 30,
2013 |
||||
|
($ in millions)
|
||||||
Beginning balance
|
$
|
1.1
|
|
|
$
|
1.1
|
|
Net realized/unrealized gains (losses)
|
—
|
|
|
—
|
|
||
Purchases
|
—
|
|
|
—
|
|
||
Transfers in (out) of Level 3
|
—
|
|
|
—
|
|
||
Ending balance
|
$
|
1.1
|
|
|
$
|
1.1
|
|
|
September 30,
2014 |
|
June 30,
2014 |
||||
|
($ in millions)
|
||||||
Deferred client conversion and start-up costs
|
$
|
133.9
|
|
|
$
|
135.5
|
|
Deferred data center costs
|
46.4
|
|
|
44.9
|
|
||
Long-term investments
|
28.5
|
|
|
25.3
|
|
||
Long-term broker fees
|
7.8
|
|
|
8.7
|
|
||
Other
|
25.1
|
|
|
22.7
|
|
||
Total
|
$
|
241.7
|
|
|
$
|
237.1
|
|
|
September 30,
2014 |
|
June 30,
2014 |
||||
|
($ in millions)
|
||||||
Employee compensation and benefits
|
$
|
90.9
|
|
|
$
|
164.4
|
|
Accrued broker fees
|
36.5
|
|
|
62.0
|
|
||
Accrued income taxes
|
18.3
|
|
|
35.0
|
|
||
Accrued dividend payable
|
31.8
|
|
|
24.7
|
|
||
Other
|
12.5
|
|
|
20.5
|
|
||
Total
|
$
|
190.0
|
|
|
$
|
306.6
|
|
|
Expiration
Date
|
|
September 30,
2014 |
|
June 30,
2014 |
|
Unused
Available
Capacity
|
||||||
|
|
|
($ in millions)
|
||||||||||
Long-term debt
|
|
|
|
|
|
|
|
||||||
Fiscal 2015 Revolving Credit Facility
|
August 2019
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
750.0
|
|
Fiscal 2007 Senior Notes
|
June 2017
|
|
124.6
|
|
|
124.6
|
|
|
—
|
|
|||
Fiscal 2014 Senior Notes
|
September 2020
|
|
399.6
|
|
|
399.5
|
|
|
—
|
|
|||
Total debt
|
|
|
$
|
524.2
|
|
|
$
|
524.1
|
|
|
$
|
750.0
|
|
|
Stock Options
|
|
Time-based
Restricted Stock Units
|
|
Performance-based
Restricted Stock Units
|
|||||||||||||||
|
Number of
Options (d)
|
|
Weighted-
Average
Exercise
Price
|
|
Number
of Shares
|
|
Weighted-
Average
Grant
Date Fair
Value
|
|
Number
of Shares
|
|
Weighted-
Average
Grant
Date Fair
Value
|
|||||||||
Balances at July 1, 2014
|
9,847,291
|
|
|
$
|
23.73
|
|
|
1,866,408
|
|
|
$
|
25.69
|
|
|
662,282
|
|
|
$
|
26.30
|
|
Granted
|
26,260
|
|
|
40.67
|
|
|
28,220
|
|
|
38.47
|
|
|
38,294
|
|
|
30.23
|
|
|||
Exercise of stock options (a)
|
(811,073
|
)
|
|
18.93
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Vesting of restricted stock units (b)
|
—
|
|
|
—
|
|
|
(980
|
)
|
|
25.15
|
|
|
(5,210
|
)
|
|
23.30
|
|
|||
Expired/forfeited
|
(5,698
|
)
|
|
17.67
|
|
|
(24,222
|
)
|
|
27.04
|
|
|
(839
|
)
|
|
27.25
|
|
|||
Balances at September 30, 2014 (c)
|
9,056,780
|
|
|
$
|
24.21
|
|
|
1,869,426
|
|
|
$
|
25.87
|
|
|
694,527
|
|
|
$
|
26.53
|
|
(a)
|
Stock options exercised during the period of July 1, 2014 through
September 30, 2014
had an intrinsic value of
$18.4 million
.
|
(b)
|
Time-based and performance-based restricted stock units that vested during the period of July 1, 2014 through
September 30, 2014
had a fair value of
$0.2 million
|
(c)
|
As of
September 30, 2014
, the Company's outstanding "in the money" stock options using the
September 30, 2014
closing stock price of
$41.63
(approximately
5.9 million
shares) had an aggregate intrinsic value of
$121.1 million
. As of
September 30, 2014
, time-based restricted stock units and performance-based restricted stock units expected to vest using the
September 30, 2014
share price of
$41.63
(approximately
1.7 million
and
0.7 million
shares, respectively) had an aggregate intrinsic value of
$72.2 million
and
$28.4 million
, respectively.
|
(d)
|
Stock options outstanding as of
September 30, 2014
have a weighted-average remaining contractual life of
5.7
years and
5.9 million
stock options are exercisable.
|
|
|
|
|
|
|
|
|
|
Foreign
Currency
Translation
|
|
Available-
for-Sale
Securities
|
|
Pension
and Post-
Retirement
Liabilities
|
|
Total
|
||||||||
|
($ in millions)
|
||||||||||||||
Balances at July 1, 2014
|
$
|
13.6
|
|
|
$
|
1.9
|
|
|
$
|
(5.2
|
)
|
|
$
|
10.3
|
|
Other comprehensive income before reclassifications
|
(4.5
|
)
|
|
(0.1
|
)
|
|
—
|
|
|
(4.6
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Balances at September 30, 2014
|
$
|
9.1
|
|
|
$
|
1.8
|
|
|
$
|
(5.2
|
)
|
|
$
|
5.7
|
|
|
Foreign
Currency
Translation
|
|
Available-
for-Sale
Securities
|
|
Pension
and Post-
Retirement
Liabilities
|
|
Total
|
||||||||
|
($ in millions)
|
||||||||||||||
Balances at July 1, 2013
|
$
|
7.6
|
|
|
$
|
1.1
|
|
|
$
|
(4.5
|
)
|
|
$
|
4.2
|
|
Other comprehensive income before reclassifications
|
(1.7
|
)
|
|
(0.1
|
)
|
|
—
|
|
|
(1.8
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income
|
—
|
|
|
—
|
|
|
0.1
|
|
|
0.1
|
|
||||
Balances at September 30, 2013
|
$
|
5.9
|
|
|
$
|
1.0
|
|
|
$
|
(4.4
|
)
|
|
$
|
2.5
|
|
|
Three Months Ended
September 30, |
||||||
|
2014
|
|
2013
|
||||
|
($ in millions)
|
||||||
Pension and Post-retirement liabilities:
|
|
|
|
||||
Amortization of loss reclassified into Selling, general and administrative expenses
|
$
|
0.1
|
|
|
$
|
0.1
|
|
Tax income
|
(0.1
|
)
|
|
—
|
|
||
Amortization of loss net of tax
|
$
|
—
|
|
|
$
|
0.1
|
|
|
Revenues
|
||||||
|
Three Months Ended
September 30, |
||||||
|
2014
|
|
2013
|
||||
|
($ in millions)
|
||||||
Investor Communication Solutions
|
$
|
394.4
|
|
|
$
|
379.1
|
|
Securities Processing Solutions
|
162.6
|
|
|
165.8
|
|
||
Foreign currency exchange
|
(1.2
|
)
|
|
0.3
|
|
||
Total
|
$
|
555.8
|
|
|
$
|
545.2
|
|
|
Earnings (Loss) before Income
Taxes
|
||||||
|
Three Months Ended
September 30, |
||||||
|
2014
|
|
2013
|
||||
|
($ in millions)
|
||||||
Investor Communication Solutions
|
$
|
37.7
|
|
|
$
|
40.4
|
|
Securities Processing Solutions
|
25.9
|
|
|
32.2
|
|
||
Other
|
(17.8
|
)
|
|
(8.0
|
)
|
||
Foreign currency exchange
|
4.2
|
|
|
4.7
|
|
||
Total
|
$
|
50.0
|
|
|
$
|
69.3
|
|
Item 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
the success of Broadridge Financial Solutions, Inc. (“Broadridge” or the “Company”) in retaining and selling additional services to its existing clients and in obtaining new clients;
|
•
|
Broadridge’s reliance on a relatively small number of clients, the continued financial health of those clients, and the continued use by such clients of Broadridge’s services with favorable pricing terms;
|
•
|
changes in laws and regulations affecting Broadridge’s clients or the services provided by Broadridge;
|
•
|
declines in participation and activity in the securities markets;
|
•
|
any material breach of Broadridge security affecting its clients’ customer information;
|
•
|
the failure of our outsourced data center services provider to provide the anticipated levels of service;
|
•
|
a disaster or other significant slowdown or failure of Broadridge’s systems or error in the performance of Broadridge’s services;
|
•
|
overall market and economic conditions and their impact on the securities markets;
|
•
|
Broadridge’s failure to keep pace with changes in technology and demands of its clients;
|
•
|
the ability to attract and retain key personnel;
|
•
|
the impact of new acquisitions and divestitures; and
|
•
|
competitive conditions.
|
•
|
Mutual Fund Proxy: The proxy and related services we provide to mutual funds when certain events occur requiring a shareholder vote including changes in directors, sub-advisors, fee structures, investment restrictions, and mergers of funds.
|
•
|
Mutual Fund Communications: Mutual fund communications services consist primarily of the distribution on behalf of mutual funds of supplemental information required to be provided to the annual mutual fund prospectus as a result of certain triggering events such as a change in portfolio managers. In addition, mutual fund communications consist of notices and marketing materials such as newsletters.
|
•
|
Proxy Contests and Specials, Corporate Actions, and Other: The proxy services we provide in connection with shareholder meetings driven by special events such as proxy contests, mergers and acquisitions, and tender/exchange offers.
|
|
Three Months Ended
September 30, |
|
|||||||||||||
|
|
|
|
|
Change
|
|
|||||||||
|
2014
|
|
2013
|
|
$
|
|
%
|
|
|||||||
|
($ in millions, except per share amounts)
|
|
|||||||||||||
Revenues
|
$
|
555.8
|
|
|
$
|
545.2
|
|
|
$
|
10.6
|
|
|
2
|
|
|
Cost of revenues
|
406.5
|
|
|
397.5
|
|
|
9.0
|
|
|
2
|
|
|
|||
Selling, general and administrative expenses
|
91.7
|
|
|
73.5
|
|
|
18.2
|
|
|
25
|
|
|
|||
Other expenses, net
|
7.6
|
|
|
4.9
|
|
|
2.7
|
|
|
55
|
|
|
|||
Total expenses
|
505.8
|
|
|
475.9
|
|
|
29.9
|
|
|
6
|
|
|
|||
Earnings before income taxes
|
50.0
|
|
|
69.3
|
|
|
(19.3
|
)
|
|
(28
|
)
|
|
|||
Margin
|
9.0
|
%
|
|
12.7
|
%
|
|
|
|
(3.7
|
)
|
pts
|
||||
Provision for income taxes
|
17.5
|
|
|
24.9
|
|
|
(7.4
|
)
|
|
(30
|
)
|
|
|||
Effective tax rate
|
35.0
|
%
|
|
35.9
|
%
|
|
|
|
(0.9
|
)
|
pts
|
||||
Net earnings
|
$
|
32.5
|
|
|
$
|
44.4
|
|
|
$
|
(11.9
|
)
|
|
(27
|
)
|
|
Basic earnings per share
|
$
|
0.27
|
|
|
$
|
0.37
|
|
|
$
|
(0.10
|
)
|
|
(27
|
)
|
|
Diluted earnings per share
|
$
|
0.26
|
|
|
$
|
0.36
|
|
|
$
|
(0.10
|
)
|
|
(28
|
)
|
|
|
Three Months Ended
September 30, |
|||||||||||||
|
|
|
|
|
Change
|
|||||||||
|
2014
|
|
2013
|
|
$
|
|
%
|
|||||||
|
($ in millions)
|
|||||||||||||
Investor Communication Solutions
|
$
|
394.4
|
|
|
$
|
379.1
|
|
|
$
|
15.3
|
|
|
4
|
|
Securities Processing Solutions
|
162.6
|
|
|
165.8
|
|
|
(3.2
|
)
|
|
(2
|
)
|
|||
Foreign currency exchange
|
(1.2
|
)
|
|
0.3
|
|
|
(1.5
|
)
|
|
*
|
|
|||
Total
|
$
|
555.8
|
|
|
$
|
545.2
|
|
|
$
|
10.6
|
|
|
2
|
|
|
Three Months Ended
September 30, |
|||||||||||||
|
|
|
|
|
Change
|
|||||||||
|
2014
|
|
2013
|
|
$
|
|
%
|
|||||||
|
($ in millions)
|
|||||||||||||
Investor Communication Solutions
|
$
|
37.7
|
|
|
$
|
40.4
|
|
|
$
|
(2.7
|
)
|
|
(7
|
)
|
Securities Processing Solutions
|
25.9
|
|
|
32.2
|
|
|
(6.3
|
)
|
|
(20
|
)
|
|||
Other
|
(17.8
|
)
|
|
(8.0
|
)
|
|
(9.8
|
)
|
|
(123
|
)
|
|||
Foreign currency exchange
|
4.2
|
|
|
4.7
|
|
|
(0.5
|
)
|
|
(11
|
)
|
|||
Total
|
$
|
50.0
|
|
|
$
|
69.3
|
|
|
$
|
(19.3
|
)
|
|
(28
|
)
|
|
Three Months Ended
September 30, |
|||||||||||||
|
|
|
|
|
Change
|
|||||||||
|
2014
|
|
2013
|
|
$
|
|
%
|
|||||||
|
($ in millions)
|
|||||||||||||
Recurring fee revenues
|
$
|
195.6
|
|
|
$
|
177.9
|
|
|
$
|
17.7
|
|
|
10
|
|
Event-driven fee revenues
|
34.9
|
|
|
40.6
|
|
|
(5.7
|
)
|
|
(14
|
)
|
|||
Distribution revenues
|
163.9
|
|
|
160.6
|
|
|
3.3
|
|
|
2
|
|
|||
Total
|
$
|
394.4
|
|
|
$
|
379.1
|
|
|
$
|
15.3
|
|
|
4
|
|
•
|
in communications with our board of directors concerning our consolidated financial performance;
|
•
|
in communications with analysts and investors as they are commonly reported and widely used enterprise level performance measures; and
|
•
|
for internal planning purposes, including the preparation of our annual operating budget.
|
|
Three Months Ended
September 30, |
||||||
|
2014
|
|
2013
|
||||
|
($ in millions)
|
||||||
Adjusted net earnings (Non-GAAP)
|
$
|
36.7
|
|
|
$
|
48.1
|
|
Adjustments:
|
|
|
|
||||
Acquisition Amortization and Other Costs
|
(6.4
|
)
|
|
(5.8
|
)
|
||
Tax impact of adjustments
|
2.2
|
|
|
2.1
|
|
||
Net earnings (GAAP)
|
$
|
32.5
|
|
|
$
|
44.4
|
|
|
Three Months Ended
September 30, |
||||||
|
2014
|
|
2013
|
||||
|
($ in millions)
|
||||||
Adjusted diluted earnings per share (Non-GAAP)
|
$
|
0.30
|
|
|
$
|
0.39
|
|
Adjustments:
|
|
|
|
||||
Acquisition Amortization and Other Costs
|
(0.05
|
)
|
|
(0.05
|
)
|
||
Tax impact of adjustments
|
0.02
|
|
|
0.02
|
|
||
Diluted earnings per share (GAAP)
|
$
|
0.26
|
|
|
$
|
0.36
|
|
|
Three Months Ended
September 30, |
||||||
|
2014
|
|
2013
|
||||
|
($ in millions)
|
||||||
Free cash flows provided by (used in) operating activities (Non-GAAP)
|
$
|
9.7
|
|
|
$
|
(18.7
|
)
|
Adjustment:
|
|
|
|
||||
Capital expenditures and software purchases
|
7.4
|
|
|
13.3
|
|
||
Net cash flows provided by (used in) operating activities (GAAP)
|
$
|
17.1
|
|
|
$
|
(5.4
|
)
|
Item 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
Item 4.
|
CONTROLS AND PROCEDURES
|
Item 1.
|
LEGAL PROCEEDINGS
|
Item 1A.
|
RISK FACTORS
|
Item 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
Period
|
Total Number of Shares Purchased
|
|
Average Price
Paid per Share
|
|
Total Number of Shares
Purchased as Part of
Publicly Announced Plans(1)
|
|
Maximum Number (or
Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans (1)
|
|||||
July 1, 2014 - July 31, 2014
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
—
|
|
August 1, 2014 - August 31, 2014
|
141,790
|
|
|
42.34
|
|
|
141,790
|
|
|
9,819,349
|
|
|
September 1, 2014 - September 30, 2014
|
209,638
|
|
|
42.95
|
|
|
209,638
|
|
|
9,609,711
|
|
|
Total
|
351,428
|
|
|
$
|
42.70
|
|
|
351,428
|
|
|
|
(1)
|
On August 6, 2014, the Board of Directors authorized the repurchase of up to an additional 6,200,000 shares of the Company's common stock. During the fiscal quarter ended
September 30, 2014
, the Company repurchased
351,428
shares of common stock at an average price per share
$42.70
. The share repurchases will be made in the open market or privately negotiated transactions in compliance with applicable legal requirements and other factors. At
September 30, 2014
, the Company had
9,609,711
shares available for repurchase under its share repurchase program.
|
Item 3.
|
DEFAULTS UPON SENIOR SECURITIES
|
Item 4.
|
MINE SAFETY DISCLOSURES
|
Item 5.
|
OTHER INFORMATION
|
Item 6.
|
EXHIBITS
|
|
|
|
|
10.1
|
|
|
Broadridge Executive Retirement and Savings Plan ("ERSP"), adopted August 1, 2014, effective January 1, 2015.
|
|
|
|
|
10.2
|
|
|
Amendment to the Broadridge Executive Deferred Compensation Program ("EDCP"), adopted August 1, 2014, effective December 31, 2014.
|
|
|
|
|
31.1
|
|
|
Certification of the President and Chief Executive Officer of Broadridge Financial Solutions, Inc., pursuant to Rule 13a-14 of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
31.2
|
|
|
Certification of the Chief Financial Officer of Broadridge Financial Solutions, Inc., pursuant to Rule 13a-14 of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
32.1
|
|
|
Certification of the President and Chief Executive Officer pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
32.2
|
|
|
Certification of the Chief Financial Officer pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
101
|
|
|
The following financial statements from the Broadridge Financial Solutions, Inc. Quarterly Report on Form 10-Q for the quarter ended September 30, 2014, formatted in eXtensible Business Reporting Language (XBRL): (i) condensed consolidated statements of earnings for the three months ended September 30, 2014 and 2013, (ii) condensed consolidated statements of comprehensive income for the three months ended September 30, 2014 and 2013, (iii) condensed consolidated balance sheets as of September 30, 2014 and June 30, 2014, (iv) condensed consolidated statements of cash flows for the three months ended September 30, 2014 and 2013, and (v) the notes to the condensed consolidated financial statements.
|
|
BROADRIDGE FINANCIAL SOLUTIONS, INC.
|
||
|
|
|
|
Date: November 6, 2014
|
By:
|
|
/s/ James M. Young
|
|
|
|
James M. Young
|
|
|
|
Vice President, Chief Financial Officer
|
|
|
|
(Principal Financial and Accounting Officer)
|
Exhibit
Number
|
|
Description of Exhibit
|
|
|
|
|
|
10.1
|
|
|
Broadridge Executive Retirement and Savings Plan ("ERSP"), adopted August 1, 2014, effective January 1, 2015.
|
|
|
|
|
10.2
|
|
|
Amendment to the Broadridge Executive Deferred Compensation Program ("EDCP"), adopted August 1, 2014, effective December 31, 2014.
|
|
|
|
|
31.1
|
|
|
Certification of the President and Chief Executive Officer of Broadridge Financial Solutions, Inc., pursuant to Rule 13a-14 of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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31.2
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Certification of the Chief Financial Officer of Broadridge Financial Solutions, Inc., pursuant to Rule 13a-14 of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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32.1
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Certification of the President and Chief Executive Officer pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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32.2
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Certification of the Chief Financial Officer pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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101
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The following financial statements from the Broadridge Financial Solutions, Inc. Quarterly Report on Form 10-Q for the quarter ended September 30, 2014, formatted in eXtensible Business Reporting Language (XBRL): (i) condensed consolidated statements of earnings for the three months ended September 30, 2014 and 2013, (ii) condensed consolidated statements of comprehensive income for the three months ended September 30, 2014 and 2013, (iii) condensed consolidated balance sheets as of September 30, 2014 and June 30, 2014, (iv) condensed consolidated statements of cash flows for the three months ended September 30, 2014 and 2013, and (v) the notes to the condensed consolidated financial statements.
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1.
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Section II
– Section II of the Plan is amended by adding the following sentence to the end thereof.
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2.
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Section V
– Section V of the Plan is amended by adding the following sentence to the end thereof.
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1.
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I have reviewed this Quarterly Report on Form 10-Q of Broadridge Financial Solutions, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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/s/ Richard J. Daly
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Richard J. Daly
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President and Chief Executive Officer
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1.
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I have reviewed this Quarterly Report on Form 10-Q of Broadridge Financial Solutions, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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/s/ James M. Young
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James M. Young
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Vice President, Chief Financial Officer
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(a)
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the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(b)
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the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Richard J. Daly
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Richard J. Daly
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President and Chief Executive Officer
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(a)
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the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(b)
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the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ James M. Young
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James M. Young
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Vice President, Chief Financial Officer
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