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Paychex, Inc. Reports Third Quarter Results

Paychex, Inc. (“Paychex,” “we,” “our,” or “us”) (NASDAQ: PAYX) today announced total service revenue of $582.4 million for the three months ended February 28, 2013 (the “third quarter”), an increase of 4% from $558.5 million for the same period last year. Net income increased 7% to $144.5 million and diluted earnings per share increased 8% to $0.40 per share.

Martin Mucci, President and Chief Executive Officer, commented, “Paychex made good progress again in the third quarter. We saw improvement in payroll services revenue with growth of 2% for the third quarter, up from 1% growth experienced for the first half of the fiscal year. Checks per payroll were strong for the third quarter, increasing over 2% compared to the prior year third quarter. Our Human Resource Services revenue continued to grow at a double-digit rate. We completed our peak selling season and were pleased with our positive growth in new Core payroll sales revenue."

Mr. Mucci added, "The Company continues to invest in our market-leading software-as-a-solution ("SaaS") technology and mobile applications through both product development and acquisitions of companies with SaaS-based business models, including our SurePayroll product which continues to perform well. A focus on new and enhanced technology coupled with our outstanding service model has led to retention success. Our client retention remains at record levels, generated by our employees' commitment to client satisfaction."

Payroll service revenue increased 2% to $393.7 million for the third quarter compared to the same period last year. Checks per payroll increased 2.3% for the third quarter compared to 1.8% for the same period last year, partially due to higher calendar year-end bonus payment activity. Revenue per check grew modestly, as a result of price increases, partially offset by discounting. Growth in payroll service revenue was tempered by one less day of payroll processing in the quarter due to the leap year last year.

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