Paychex Inc PAYX

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Paychex, Inc. is a provider of human capital management solutions for human resources (HR), payroll, benefits and insurance services for small-to-medium-sized businesses and their employees across the United States and parts of Europe. The Company offers a portfolio of HCM technology and HR advisory solutions that help its clients navigate the challenges of HR. Its clients have the option of doing payroll online using its software as a service (SaaS) technology, outsourcing to its payroll specialists, or using a combination of those solutions. Payroll is integrated with HCM software modules for clients who have more complex HR needs. It also provides comprehensive HR outsourcing through its administrative services organization and PEO solutions. The Company's HCM SaaS platform is Paychex Flex, which provides workforce management throughout the employee life cycle from recruiting and hiring to retirement, including recruiting, onboarding, HR, time and attendance and employee benefits.

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Paychex Inc

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Post by bc4uon Dec 19, 2012 9:11pm

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Post# 20753417

PAYCHEX, INC. REPORTS SECOND QUARTER RESULTS

December 19, 2012

SECOND QUARTER FISCAL 2013 HIGHLIGHTS
• Total service revenue increased 5% to $559.4 million.
• Payroll service revenue increased 1% to $377.0 million.
• Human Resource Services revenue increased 12% to $182.4 million.
• Operating income increased 6% to $230.0 million and operating income, net of certain items, also increased 6% to
$220.0 million.
• Net income and diluted earnings per share increased 5% to $147.9 million and $0.41 per share, respectively.

ROCHESTER, NY, December 19, 2012 — Paychex, Inc. (“Paychex,” “we,” “our,” or “us”) (NASDAQ:PAYX) today
announced total service revenue of $559.4 million for the three months ended November 30, 2012 (the “second quarter”), an
increase of 5% from $535.0 million for the same period last year. Net income and diluted earnings per share both increased 5%
to $147.9 million and $0.41 per share, respectively.
Martin Mucci, President and Chief Executive Officer, commented, “We made solid progress in the second quarter. While
payroll services revenue grew modestly at 1.4%, impacted by client disruptions from Hurricane Sandy, Human Resource Services
revenue grew at a double-digit rate as we continue to experience success in selling value-added solutions to our clients. Checks
per payroll increased 1.2% for the quarter over the previous year. We are seeing good results from our selling efforts in the smallbusiness
market and are well-positioned for our peak selling season. In addition, our client retention levels remain near historic
high rates generated by our employees' commitment to client satisfaction. During the quarter, we introduced our industry-leading
online client report center and acquired ExpenseWire, an online expense management solution for our mid-market clients.”
Payroll service revenue increased 1% to $377.0 million for the second quarter compared to the same period last year. Checks
per payroll increased 1.2% for the second quarter compared to 1.8% for the same period last year. Revenue per check grew
modestly, as a result of price increases, partially offset by discounting. Growth in payroll service revenue was tempered by lost
revenue from Hurricane Sandy, approximating 0.5% of payroll revenue growth, and the impact of client mix in the mid-market.
Human Resource Services (“HRS”) revenue increased 12% to $182.4 million for the second quarter compared to the same
period last year. The following factors contributed to this growth:
• Retirement services revenue was positively impacted by client growth and an increase in the average asset value of retirement
services client employees’ funds, offset partially by the impact from a shift in the mix of assets within these funds to
investments that earn lower fees from external fund managers.
• Paychex HR Solutions revenue was positively impacted by price increases and growth in both clients and client employees.
The rate of growth for Paychex HR Solutions revenue was tempered by fewer client employees within our professional
employer organization, compared to the same period last year.
• Insurance services revenue continues to benefit from the growth in health and benefits services applicants and increases
in both clients and premiums in workers’ compensation insurance services.
Total expenses increased 4% to $339.4 million for the second quarter compared to the same period last year. We continued
to invest in product development and supporting technology, with those expenses growing at a faster rate than total expenses
during the second quarter. This was offset by increased productivity within operations, which has allowed us to maintain solid
operating margins.