Automatic Data Processing
said Tuesday it will write off the remaining book value of its investment in privately held
Bridge Information Systems
, which will result in a non-cash charge of $45 million, or $27 million after taxes, in the third quarter.
ADP sold its brokerage front-office business to Bridge in 1999 and received $90 million of Bridge convertible preferred stock. An initial write-down of $45 million was recorded in the quarter ending Dec. 31, 2000.
"We are very disappointed that conditions at Bridge have caused us to write off our investment," ADP said in a statement. "The only good news is that we have no remaining investment in them. This brings to a close the fiscal 1999 disposition of our brokerage front-office business. This is a non-cash write-off and there is no impact to our current business."
With the exception of the Bridge charges, ADP said it remains comfortable with its previous forecast of 16% to 18% earnings-per-share growth for its fiscal year ending June 30. The company earned $1.31 in the year-ago period. Growth of 16% to 18% translates into earnings of between $1.52 and $1.54. Fourteen analysts polled by
First Call/Thomson Financial
are calling for the company to earn $1.53 for the fiscal year.
Shares of ADP were up $1.08, or 1.8%, to $60.09 in recent
New York Stock Exchange
Earlier this month Bridge was handed an
involuntary bankruptcy petition by one of its creditors. The financial news company was expected to file for Chapter 11 bankruptcy protection so it could restructure its finances and continue operating instead of being forced into liquidation.