ADP Reports 15% EPS Increase For Fiscal 1999 Before Impact of Previously Reported Non-Recurring Items - Automatic Data Processing Inc - Company Financial Information

Edge: Work-Group Computing Report, August 16, 1999

Automatic Data Processing, Inc. (NYSE:AUD) achieved record revenues and earnings in its fourth quarter and fiscal year ended June 30, 1999, Arthur F. Weinbach, chairman and chief executive officer, announced Tuesday. This represents ADP's 38th consecutive year of double-digit earnings per share growth and the 152nd consecutive quarter of record highs in both revenues and earnings per share since becoming a public company in 1961.

For fiscal 1999, revenues increased 12% to $5.5 billion. Prior to non-recurring items recorded earlier in the year, pretax earnings increased 20%, net earnings advanced 17% and diluted earnings per share increased 15% to $1.13 from $.98 last year. Earnings per share after the non-recurring items were $1.10.

Commenting on overall results, Mr. Weinbach said, "We had a very good year in 1999. Revenue growth for the year in Employer Services was 15%, reflecting strong results in both new business sales and internal revenue growth. Brokerage Services revenue growth was 5%, impacted by the sale of the front office business. Excluding this sale, Brokerage revenue growth was 21%, helped by strong trading volume. Dealer Services grew 7%, in line with expectations. Claims revenue growth was 58%, aided by last May's acquisition of Audatex -- the leading provider of automotive claims estimating services in Europe.

"Our market leadership, positive momentum and significant potential in our core businesses favorably position us for the future. We expect fiscal 2000 to be our 39th consecutive year of double-digit earnings per share growth. We anticipate improved operating margins and pretax earnings growth in excess of 15%. With a slightly higher tax rate and increased shares outstanding in 2000, we expect diluted EPS growth of 13-15% over the $1.13 calculated for 1999 before non-recurring items, and growth of 16-18% over the $1.10 reported after non-recurring items.

"We expect revenue to grow about 10% in fiscal 2000 despite the impact, particularly in the first half of the year, of fiscal 1999 dispositions," Mr. Weinbach concluded.

Below is a summary of comparative results:

                         Three Months Ended      Year  Ended
                              June 30,             June 30,
                          1999       1998       1999       1998
                          (000's omitted except per share data)

Revenues(R)          $1,470,687 $1,336,310 $5,540,141   $4,925,956

Earnings before
 income taxes(R)     $  292,683 $  240,176 $1,084,500(A)$  890,717
Provision for
 income taxes        $  100,894 $   76,328 $  387,660(A)$  282,455
Net earnings(R)      $  191,789 $  163,848 $  696,840(A)$  608,262

Average shares
 outstanding            620,786    609,968    615,630      600,803
Basic earnings
 per share(R)        $      .31 $      .27 $     1.13   $     1.01

Diluted net
 earnings (R)        $  192,551 $  165,030 $  700,447   $  616,095
Diluted shares
 outstanding            640,415    633,251    636,892      628,196
Diluted earnings
 per share (R)       $      .30 $      .26 $     1.10   $      .98

(R) Record high

(A) During fiscal 1999 the Company sold several businesses and decided to exit several other businesses and contracts. The combination of these transactions and certain other non-recurring charges resulted in approximately $37 million of pretax income and a $40 million provision for income taxes. 1999 also includes approximately $21 million of transaction costs and other non-recurring adjustments ($14 million after tax) related to an acquisition.

ADP, with over $5 billion in revenues and over 450,000 clients, is one of the largest independent computing services firms in the world.