Financial technology provider Broadridge Financial Solutions, Inc. (NYSE:BR) has reported financial results for the fourth quarter of its fiscal year 2016.
Revenues rose 8% to $2.9 billion, led by 9% growth in recurring fee revenues, and Adjusted EPS increased 11% to $2.73. Results for the three and twelve months ended June 30, 2016 compared with the same period last year were as follows:
Richard J. Daly, Broadridge
Richard J. Daly, President and Chief Executive Officer of Broadridge, commented:
Broadridge reported record results for fiscal year 2016. Revenues rose 8% to $2.9 billion, led by 9% growth in recurring fee revenues, and Adjusted EPS increased 11% to $2.73. I am especially pleased by the strong demand we saw for our products and services, as evidenced by $151 million of closed sales, an all-time high for Broadridge. We also continued to deploy capital to strengthen and grow our business, including the acquisition of DST’s North American Customer Communications business in July, which we expect will deliver significant strategic and financial benefits over a multi-year period.”
Financial Results for Fourth Quarter Fiscal Year 2016
Revenues and Sales
Revenues for the fourth quarter of fiscal year 2016 increased 5% to $975 million, compared to $930 million for the prior year period. The $45 million increase was driven by:
- higher recurring fee revenues of $43 million, or 7%;
- higher distribution revenues of $4 million, or 1%; and
- higher event-driven fee revenues of $3 million, or 6%.
The positive contribution from recurring fee revenues reflected gains from Net New Business (3 pts), contributions from acquisitions (2 pts), and internal growth (2 pts). The Company defines Net New Business as recurring revenue from closed sales less recurring revenue from client losses.
Closed sales for the fourth quarter of fiscal year 2016 increased 46% to $57 million, compared to $39 million for the prior year period.
Operating Income
For the fourth quarter of fiscal year 2016:
- Operating income was $270 million, an increase of $9 million, or 3%, compared to $262 million for the prior year period.
- Operating income margin decreased to 27.7%, compared to 28.2% for the prior year period.
- Adjusted Operating income was $279 million, an increase of $9 million, or 3%, compared to $270 million for the prior year period.
- Adjusted Operating income margin decreased to 28.6%, compared to 29.1% for the prior year period.
The increase in Operating income and Adjusted Operating income was due to revenue growth. The 50 basis points decline in Operating income margin and Adjusted Operating income margin was primarily the result of higher corporate operating expenses, including severance costs and professional service fees, partially offset by higher segment pre-tax margins compared to the prior year period.
Net Earnings and Earnings Per Share
For the fourth quarter of fiscal year 2016:
- Net earnings increased 3% to $170 million, compared to $166 million for the prior year period.
- Adjusted Net earnings increased 2% to $176 million, compared to $172 million for the prior year period.
- Diluted earnings per share increased 4% to $1.40, compared to $1.35 for the prior year period.
- Adjusted Diluted earnings per share increased 4% to $1.45 from $1.40 for the prior year period
Diluted earnings per share and Adjusted Diluted earnings per share amounts in the current year period were positively impacted $0.01 per share and $0.02 per share, respectively, by a 1% decline in the number of weighted-average diluted shares outstanding to 121 million from 123 million for the prior year period.