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Paychex, Inc. Reports Second Quarter Results

The available-for-sale securities within the funds held for clients and corporate investment portfolios reflected a net unrealized gain of $62.9 million as of November 30, 2012, compared with a net unrealized gain of $59.5 million as of May 31, 2012. During the first six months, the net unrealized gain on our investment portfolio ranged from $53.8 million to $64.1 million. The net unrealized gain on our investment portfolios was approximately $54.4 million as of December 14, 2012.

YEAR-TO-DATE FISCAL 2013 HIGHLIGHTS

The highlights for the six months ended November 30, 2012 are as follows:

  • Payroll service revenue increased 1% to $762.9 million, with checks per payroll increasing 1.6% compared to the same period last year.
  • HRS revenue increased 10% to $364.6 million.
  • Total service revenue increased 4% to $1.1 billion.
  • Total revenue increased 3% to $1.1 billion.
  • Combined interest on funds held for clients and investment income, net, decreased $0.9 million, or 4%.
  • Operating income increased 5% to $468.0 million, and operating income, net of certain items, also increased 5% to $447.9 million.
  • Net income and diluted earnings per share both increased 4% to $301.0 million and $0.83 per share, respectively.
  • Cash flow from operations was $326.0 million.

OUTLOOK

Our outlook for the fiscal year ending May 31, 2013 (“fiscal 2013”) is based upon current market, economic, and interest rate conditions continuing with no significant changes. Our expected full year fiscal 2013 payroll revenue growth rate is based upon anticipated client base growth, offset by an expected lower rate of growth in checks per payroll, and modest increases in revenue per check. HRS revenue growth is expected to remain in line with our historical organic experience. Prior acquisitions are expected to have minimal impact on projected revenue growth rates for fiscal 2013.

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