Broadridge Financial Solutions, Inc. (BR)

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Broadridge Financial Solutions, Inc. (BR)

F4Q10 (Qtr End 06/30/10) Earnings Call Transcript

August 12, 2010 8:30 am ET

Executives

Rick Rodick – VP, IR

Rich Daly – CEO

Dan Sheldon – Corporate VP and CFO

Analysts

James Kissane – Bank of America/Merrill Lynch

Ian Zaffino – Oppenheimer & Co.

Tien-tsin Huang – JP Morgan

Stefan Mykytiuk [ph]

Presentation

Operator

Good morning. My name is Monica and I’ll be your conference operator today. At this time, I would like to welcome everyone to the fourth quarter 2010 fiscal earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks there will be a question-and-answer session. (Operator instructions) Thank you. Mr. Rick Rodick, you may begin your conference.

Rick Rodick

Thank you, Monica. Good morning, everyone, and welcome to the Broadridge quarterly earnings call and webcast for the fourth quarter and fiscal year 2010. This morning I am here with Rich Daly, Chief Executive Officer for Broadridge and Dan Sheldon, Chief Financial Officer for Broadridge.

I’m sure by now everyone has had an opportunity to review the earnings release we issued this morning. The new release and slide presentation that accompanies today’s call and webcast can be found on the Investor Relations homepage of our Web site at broadridge.com.

I’d like to remind everyone that we’ve also included a copy of the key metrics on pages 26 and 27 in the appendix of our webcast for your reference. You may find these metrics helpful during Dan’s review of the financial results for each segment.

During today’s conference call we’ll discuss some forward-looking statements regarding Broadridge that involve risk. These risks are discussed here on slide number one and we encourage participants to refer to our SEC filings, including those on Forms 8-K, 10-Q and 10-K for a complete discussion of forward looking statements and risk factors.

Before we begin, I’d like to point out to everyone that as a result of the Penson transaction we announced in the first quarter and closed in the fourth quarter, the clearing business is now shown as discontinued operations and our remaining outsourcing business is now part of the Securities Processing Solutions segment. Also, as a result of the reporting treatment of the Penson transaction, the financial results discussed today will address continuing operations unless otherwise stated.

Now, let’s turn to slide number two and view today’s agenda. Rich Daly will start today’s call with his opening remarks and will provide you with a summary of the financial results for the fourth quarter and fiscal year 2010, followed by a discussion of a few key topics. Dan Sheldon will then review the fourth quarter and fiscal year 2010 results and the fiscal year 2011 financial guidance in further detail. Rich will then return, provide his overall summary and some closing thoughts before we head into the Q&A part of the call.

Now, please turn to the next slide number three and I’ll turn the call over to Rich Daly. Rich?

Rich Daly

Thanks Rick. Good morning, everyone. This morning as a part of my opening remarks, I’ll talk about the following topics. First, I’ll start with an overview of our financial performance. Then I will discuss our key accomplishment for fiscal year 2010, followed by a review of our strong closed sales performance and sales pipeline and then a regulatory update, which I am particularly excited about. After Dan provides you more of the financial details on the quarter and the full year plus a guidance update, I’ll wrap it up with my closing comments before Q&A.

Let’s start on slide number four. Our financial performance for the quarter and full year was within our guidance range. I am satisfied with our overall results for fiscal year 2010, and our ability to achieve our revenue and earnings results during these challenging market conditions.

We had record full year closed sales of $175 million, which represents 26% increase over last year’s results. In addition to our strong closed sales results we also had excellent client revenue retention of 98%.

Revenues increased 7% for the year which was in line with our guidance. The revenue growth was primarily driven by growth in event-driven mutual fund proxies, new sales and acquisitions.

Key market-driven recurring revenues continue to run at levels flat or below last year. Trades, stock record and statement volumes were all down in fiscal year 2010 reflecting the continuing weakness of the financial markets.

Non-GAAP diluted earnings per share from continuing operations of $1.56 were at the mid-point of our guidance and the growth was primarily due to a lower share count.

We had significant share repurchases in fiscal year 2010. We repurchased approximately 13.7 million shares during the fiscal year, of which 7.1 million were repurchased in the fourth quarter. We also repurchased an additional 2.5 million shares subsequent to year-end in July.

All told, for the period of August 2009 through July 2010 we spent approximately $330 million on share repurchases and last night our Board authorized an additional 10 million shares for future repurchases.

Later in the call, I’ll talk about all the ways we could use our strong free cash flow to create shareholder value.

As we previously announced, the company’s Board of Directors declared a quarterly dividend of $0.15 per share payable October 1. The annual dividend was increased approximately 7% to $0.60 per share.

Read the rest of this transcript for free on seekingalpha.com