Ceridian Reports First Quarter 2006 Results
First Quarter 2006 Highlights: * EPS of $.24 per diluted share at top of February guidance range. * Revenue of $384.3 million up almost 8 percent over prior year. o Human Resource Solutions revenue up almost 6 percent, to $279.9 million. o Comdata revenue up 13 percent, to $104
MINNEAPOLIS (April 25, 2006) – Ceridian Corporation (NYSE: CEN) today reported first quarter 2006 net earnings of $36.2 million, or $.24 per diluted share, on revenue of $384.3 million. For the first quarter of 2005, net earnings were $22.0 million, or $.15 per diluted share, on revenue of $357.4 million.
“The first quarter results reflect a solid start for 2006,” said Ronald L. Turner, president and chief executive officer of Ceridian. “In Human Resource Solutions (HRS), we met our margin targets for the quarter and are on track to deliver the improvements built into our plan for 2006. Similarly, the Comdata business delivered another strong quarter.
“The strong overall performance in both businesses drove earnings per diluted share for the first quarter to the top of the range we communicated in February,” Turner continued. “Revenue for the quarter in HRS was up almost 6 percent over last year, with higher interest rates accounting for almost 3 percent of the increase. In the quarter, retention levels in the US HRS payroll business were less than plan, although slightly higher than the prior year. In addition, revenue deferrals were greater than expected during the quarter. HRS segment earnings as a percentage of revenue were near the top of our guided range. The major factors driving the current year improvement were higher interest income on a growing float balance, continuing cost controls and internal revenue growth.
“The primary operational indicators in the HRS business are strong,” Turner said. “Float balances grew almost 8 percent, customer retention was stable, and customer employment levels were up and in line with our plan for the quarter.
“Overall order growth in HRS was in the mid-teens. Order growth in the core U.S. mid-sized company market and in our international operations were solidly in double digits. The pipeline for larger Human Resource Outsourcing (HRO) and government business in the U.S. appears to be strong, but the total contract value signed in the first quarter was less than the prior year quarter, which tempered the overall HRS order growth.
“Comdata’s performance was again very strong,” said Turner. “Revenue growth was at the high end of our guided range, up 13 percent over the first quarter of last year, with higher fuel prices accounting for about 3 percent of the increase. Demand for the BusinessLink product and further penetration into the gasoline fleet market continue to drive growth in Comdata’s transportation segment. In addition, several new, marquee transportation customers were signed during the quarter. Despite a loss on Comdata’s diesel fuel derivative instruments of $0.9 million, Comdata’s segment earnings as a percentage of revenue were ahead of plan in the quarter, at 32.9 percent. The loss on Comdata’s diesel fuel derivative instruments in the prior year quarter was $7.2 million.
“The strong overall earnings performance generated healthy cash flow in the quarter,” Turner concluded. “Cash flow from operations was $42.3 million, capital expenditures were $11.2 million, and depreciation and amortization expense was $21.0 million. The cash balance at March 31, 2006, increased to $408.4 million. The strong quarterly earnings, along with proceeds from stock option exercises of $44.3 million during the quarter drove the cash balances higher. Stock repurchases during the quarter were 0.3 million shares. The Company intends to resume its stock repurchase program within the next few days.
Stock based compensation expense for the quarter was higher than planned at $8.7 million pre-tax, or $.04 per share. Stock based compensation expense in the first quarter of 2005 was $0.7 million pre-tax.
Source: Ceridian
