Ceridian Reports Strong Fourth Quarter and Full Year 2007 Performance
MINNEAPOLIS (March 20, 2008) – Ceridian Corporation today reported selected financial data for the fourth quarter and full year 2007. Ceridian became a private company in a merger which closed on November 9, 2007. The data reported herein is unaudited.
The financial data and commentary set forth in this release do not reflect the application of purchase accounting which will be required as a result of the merger. This data has been furnished to provide a picture of the Company’s results and separates the effects of unusual events (such as severance and restructuring costs) and items related to the merger (such as proxy costs and stock compensation expenses) from the operating results. The final financial results of the company after giving effect to these items will differ from the financial data provided below.
Fourth Quarter 2007 Financial Highlights:
For the fourth quarter:
* Revenue was $447.5 million, up 10.8 percent over the same quarter of the prior year.
o Human Resource Solutions (HRS) revenue up 9.7 percent over the comparable quarter last year to $310.1 million.
o Comdata posted its 15th consecutive quarter of double digit revenue growth up 13.2 percent over the comparable quarter last year to $137.4 million.
* HRS and Comdata segment adjusted operating margins were 18.8 percent and 31.9 percent, respectively.
* Adjusted earnings before interest, taxes, depreciation and amortization was $124.0 million.
* Capital expenditures were $13.0 million.
* Average customer funds balance grew 13.2 percent. Yield was 4.7 percent.
* Unusual costs totaled $32.9 million which included $29.4 million in stock compensation expense, $5.5 million in proxy costs and $2.0 million of favorable miscellaneous other adjustments.
* Interest expense from November 10th to December 31st, 2007 totaled $48.7 million.
For the full year 2007, Ceridian reported revenue of $1,673.4 million, up 6.9% over 2006. HRS revenue for 2007 was up 4.1% over 2006, at $1,144.5 million. Comdata revenue for 2007 was up 13.7%, to $528.9 million.
“Ceridian’s fourth quarter performance was excellent,” said Kathryn V. Marinello, chairman, president, and chief executive officer of Ceridian Corporation. “Over the comparable period of the prior year operating margins excluding one-time items in our HRS business grew approximately 19 percent in the fourth quarter, and improved by 430 basis points for the year. This performance resulted directly from continued successful execution on the five point operational plan adopted early in 2007.”
“The operating metrics in the HRS business were solid,” Marinello continued. “Float balances for the fourth quarter grew at a rate of 13.2 percent over the comparable period of the prior year, and the yield remained solid at 4.7 percent. Customer retention levels improved on a year-over-year basis and remained over 90 percent. Orders for the quarter were up 18 percent, driven by strong performances in HRO, the Lifeworks commercial business and the UK. Customer employment levels in the U.S. were up 1.6 percent in the quarter.”
“Comdata posted another solid top-line performance,” Marinello said. “Revenue was up 13.2 percent over the comparable period of the prior year, extending Comdata’s string of double-digit top-line growth quarters to fifteen. Higher fuel prices contributed about 3 percent to the growth rate. Overall growth was driven primarily by strong Comdata card transaction growth in both the over-the-road and business fleet segments, private label processing and in regulatory compliance. Overall transportation business transactions were up about 5 percent. Growth in the retail services business was in the high single digits for the quarter, tempered somewhat by a weaker domestic retail environment. Comdata’s margins for the quarter were 31.9 percent. Comdata’s margins for the quarter were lower on a year-over-year basis because of a higher mix of lower margin gift card sales and additional IT investments in the retail services business. Margins in the Comdata transportation services business remained robust.”
Preliminary purchase price allocation and other merger related costs are nearing completion and will be included in our finalized December 31, 2007 financials. Final purchase price allocation will be included in our year end December 31, 2008 financials.
Source: Ceridian
