Broadridge Reports First Quarter Fiscal Year 2012 Results

LAKE SUCCESS, NY, Nov 03 (MARKET WIRE) --
Broadridge Financial Solutions, Inc. (NYSE: BR) today reported financial
results for the first quarter of its fiscal year 2012. For the three
months ended September 30, 2011, the Company reported revenues of $476
million, GAAP net earnings from continuing operations of $17 million,
Non-GAAP net earnings from continuing operations of $19 million, GAAP
diluted earnings per share from continuing operations of $0.13 and
Non-GAAP diluted earnings per share from continuing operations of $0.15.
This compares with revenues of $421 million, GAAP net earnings from
continuing operations of $13 million and GAAP diluted earnings per share
from continuing operations of $0.10 for the comparable quarter of the
previous fiscal year.

Commenting on the results, Richard J. Daly, Chief Executive Officer,
said, "Overall, I am pleased with our first quarter results. Our revenues
and earnings were up significantly from last year as our core recurring
revenues were strong and we also benefitted from our recent acquisitions.
As anticipated in our guidance, event-driven revenues remained weak;
however, trade volumes were up for the quarter. It is too early in our
fiscal year to determine whether these trends will continue."

Mr. Daly concluded, "Due to the seasonal nature of our business, our
first quarter makes the smallest quarterly contribution to our annual
results; however, it always feels good to be ahead of expectations at any
point in time. Our client revenue retention rate remained very strong at
99% and our recurring revenue closed sales are up over last year,
increasing our confidence in the guidance ranges that we provided in
August."

IBM Data Center Migration

In March 2010, Broadridge entered into an Information Technology Services
Agreement (the "IT Services Agreement") with IBM, under which IBM will
provide certain aspects of our information technology infrastructure that
are currently being provided under our data center outsourcing services
agreement with ADP. Our Non-GAAP results exclude the impact of the costs
the Company expects to incur in connection with the migration of our data
center to IBM (the "Migration"). These Migration costs are significant
and we believe this information helps investors understand the effect of
the Migration on our reported results and provides a better
representation of our actual performance. We remain confident that the
Migration will be substantially complete by the end of our 2012 fiscal
year.

Financial Results for First Quarter Fiscal Year 2012

For the first quarter of fiscal year 2012, revenues increased 13% to $476
million compared to $421 million for the comparable period last year. The
increase was driven by a positive contribution from recurring fee
revenues of approximately $45 million including acquisitions, the Penson
outsourcing services agreement, internal growth, net new business
(defined as revenue from closed sales less client losses) and higher
distribution revenues of $10 million. GAAP pre-tax margins from
continuing operations of 5.5% increased compared to 5.0% for the same
period last year due to revenue mix. Non-GAAP pre-tax margins from
continuing operations were 6.2%.

GAAP net earnings from continuing operations of $17 million increased 26%
compared to $13 million for the same period last year. Non-GAAP net
earnings from continuing operations were $19 million. GAAP diluted
earnings per share from continuing operations increased to $0.13 per
share on lower weighted-average shares outstanding, compared to $0.10 per
share in the first quarter of fiscal year 2011. Non-GAAP diluted earnings
per share from continuing operations were $0.15 per share.

Our total closed sales of $31 million increased 31% from last year's
comparable period and our recurring revenue closed sales of $20 million
increased 14%. Free cash flow was approximately $17 million. During the
first quarter of fiscal year 2012, the Company repurchased approximately
0.3 million shares of Broadridge common stock under its stock repurchase
plan, at an average price of approximately $24.05 per share.
Approximately 7.2 million shares remain available for purchase under the
Company's current stock repurchase plan.

Analysis of First Quarter Fiscal Year 2012

Investor Communication Solutions

Revenues for the Investor Communication Solutions segment increased 12%
to $313 million in the first quarter of fiscal year 2012 compared to the
first quarter of fiscal year 2011. Higher recurring fee revenues
contributed $24 million and higher distribution revenues contributed $10
million. The positive contribution from recurring fee revenues was driven
primarily by acquisitions, internal growth and net new business.
Operating margin increased by 0.4 percentage points to 2.7% as a result
of revenue mix.

Securities Processing Solutions

Revenues for the Securities Processing Solutions segment increased 12% to
$158 million in the first quarter of fiscal year 2012 compared to the
first quarter of fiscal year 2011. The increase was driven by net new
business, internal growth, and acquisitions. Operating margin increased
by 2.9 percentage points to 17.6% as a result of increased trade volumes.

Other

IBM Migration costs of $3 million were recorded in Other.

New Five-Year Term Loan and Revolving Credit Facilities
On September 22,
2011, the Company entered into a $990 million senior unsecured credit
facility, consisting of a $490 million five-year term loan facility and a
$500 million five-year revolving credit facility. Borrowings under the
five-year term loan facility and five-year revolving credit facility bear
interest at LIBOR plus 125 basis points. The Company used a portion of
the proceeds of the term loan facility to repay $200 million of
outstanding borrowing under the previous five-year term loan and $200
million of outstanding borrowing under the previous five-year revolving
credit facility. The previous five-year term loan facility and the
previous five-year revolving credit facility both had expiration dates of
March 29, 2012 and were cancelled upon repayment.

Fiscal Year 2012 Financial Guidance
As a result of the acquisition of
Paladyne Systems, Inc. in September 2011, we are increasing our revenue
guidance, but maintaining our earnings guidance. We anticipate revenue
growth in the range of 9% to 11%, GAAP earnings from continuing
operations before income taxes margin in the range of 11.5% to 12.2% and
Non-GAAP earnings from continuing operations before income taxes margin
in the range of 12.9% to 13.6%. We anticipate GAAP diluted earnings per
share from continuing operations in the range of $1.34 to $1.44, and
Non-GAAP diluted earnings per share from continuing operations in the
range of $1.50 to $1.60, based on diluted weighted-average shares
outstanding of approximately 128 million shares. Free cash flow,
excluding the Migration costs, is expected to be in the range of
approximately $210 million to $260 million. Recurring revenue closed
sales are expected to be in the range of $110 million to $150 million.

Our guidance does not take into consideration the effect of any future
acquisitions, additional debt or share repurchases in excess of the
repurchases needed to be at our 128 million diluted weighted-average
outstanding shares guidance.

Non-GAAP Measures
In certain circumstances, results have been presented
that are not generally accepted accounting principles measures
("Non-GAAP") and should be viewed in addition to, and not as a substitute
for, the Company's reported results. Net earnings excluding the Migration
costs, diluted earnings per share excluding the Migration costs, pre-tax
margins excluding the Migration costs, and free cash flow are Non-GAAP
measures. These measures are adjusted to exclude costs to be incurred in
connection with the Migration as Broadridge believes this information
helps investors understand the effect of the Migration on reported
results and provides a better representation of our actual performance.
Free cash flow is a Non-GAAP measure and is defined as cash flow from
operating activities, less capital expenditures and purchases of
intangibles. Management believes such Non-GAAP measures provide investors
with a more complete understanding of Broadridge's underlying operational
results. These Non-GAAP measures are indicators that management uses to
provide additional meaningful comparisons between current results and
prior reported results, and as a basis for planning and forecasting for
future periods. Accompanying this release is a reconciliation of Non-GAAP
measures to the comparable GAAP measures.

Earnings Conference Call
An analyst conference call will be held today,
Thursday, November 3rd at 8:30 a.m. ET. A live webcast of the call will
be available to the public on a listen-only basis. To listen to the
webcast and view the slide presentation, go to www.broadridge-ir.com and
click on the webcast icon. The presentation will be available to download
and print approximately 30 minutes before the webcast on the Broadridge
Investor Relations home page at www.broadridge-ir.com. Broadridge's news
releases, current financial information, SEC filings and Investor
Relations presentations are accessible on the same website.

About Broadridge
Broadridge is a technology services company focused on
global capital markets. Broadridge is the market leader enabling secure
and accurate processing of information for communications and securities
transactions among issuers, investors and financial intermediaries.
Broadridge builds the infrastructure that underpins proxy services for
over 90% of public companies and mutual funds in North America; processes
more than $4 trillion in fixed income and equity trades per day; and
saves companies billions annually through its technology solutions. For
more information about Broadridge, please visit www.broadridge.com.

Forward-Looking Statements
This press release and other written or oral
statements made from time to time by representatives of Broadridge may
contain "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Statements that are not
historical in nature, and which may be identified by the use of words
like "expects," "assumes," "projects," "anticipates," "estimates," "we
believe," "could be" and other words of similar meaning, are
forward-looking statements. In particular, information appearing in the
"Fiscal Year 2012 Financial Guidance" section are forward-looking
statements. These statements are based on management's expectations and
assumptions and are subject to risks and uncertainties that may cause
actual results to differ materially from those expressed. These risks and
uncertainties include those risk factors discussed in Part I, "Item 1A.
Risk Factors" of our Annual Report on Form 10-K for the fiscal year ended
June 30, 2011 (the "2011 Annual Report"), as they may be updated in any
future reports filed with the Securities and Exchange Commission. All
forward-looking statements speak only as of the date of this press
release and are expressly qualified in their entirety by reference to the
factors discussed in the 2011 Annual Report. These risks include: the
success of Broadridge in retaining and selling additional services to its
existing clients and in obtaining new clients; Broadridge's reliance on a
relatively small number of clients, the continued financial health of
those clients, and the continued use by such clients of Broadridge's
services with favorable pricing terms; changes in laws and regulations
affecting the investor communication services provided by Broadridge;
declines in participation and activity in the securities markets; overall
market and economic conditions and their impact on the securities
markets; any material breach of Broadridge security affecting its
clients' customer information; the failure of Broadridge's outsourced
data center services provider to provide the anticipated levels of
service; any significant slowdown or failure of Broadridge's systems or
error in the performance of Broadridge's services; Broadridge's failure
to keep pace with changes in technology and demands of its clients;
Broadridge's ability to attract and retain key personnel; the impact of
new acquisitions and divestitures; and competitive conditions. Broadridge
disclaims any obligation to update or revise forward-looking statements
that may be made to reflect events or circumstances that arise after the
date made or to reflect the occurrence of unanticipated events, other
than as required by law.

Broadridge Financial Solutions, Inc.
Condensed Consolidated Statements of Earnings
(In millions, except per share amounts)
(Unaudited)
Three Months Ended
September 30,
-------------------
2011 2010
--------- ---------

Revenues $ 476.4 $ 421.4
--------- ---------

Cost of revenues 382.8 336.6
Selling, general and administrative expenses 64.7 61.5
Other expenses, net 2.7 2.4
--------- ---------
Total expenses 450.2 400.5
--------- ---------

Earnings from continuing operations before income taxes 26.2 20.9
Provision for income taxes 9.5 7.6
--------- ---------
Net earnings from continuing operations $ 16.7 $ 13.3
========= =========

Basic earnings per share:
Basic earnings per share from continuing operations $ 0.14 $ 0.11
========= =========

Diluted earnings per share:
Diluted earnings per share from continuing operations $ 0.13 $ 0.10
========= =========

Weighted-average shares outstanding:
Basic 123.7 126.5
Diluted 126.7 129.6

Dividends declared per common share $ 0.16 $ 0.15

Broadridge Financial Solutions, Inc.
Condensed Consolidated Balance Sheets
(In millions, except per share amounts)
(Unaudited)
September 30, June 30,
2011 2011
------------- -------------

Assets
Current assets:
Cash and cash equivalents $ 252.8 $ 241.5
Accounts receivable, net of allowance for
doubtful accounts of $2.0 and $2.0,
respectively 328.5 406.6
Other current assets 104.0 103.3
------------- -------------
Total current assets 685.3 751.4
Property, plant and equipment, net 78.9 83.1
Other non-current assets 204.7 186.7
Goodwill 793.1 735.6
Intangible assets, net 165.2 147.2
------------- -------------
Total assets $ 1,927.2 $ 1,904.0
============= =============

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 93.5 $ 119.0
Accrued expenses and other current
liabilities 171.0 230.3
Deferred revenues 29.1 33.4
Short-term borrowings -- 400.0
------------- -------------
Total current liabilities 293.6 782.7
Long-term debt 614.3 124.3
Deferred taxes 68.0 71.3
Other non-current liabilities 98.7 81.1
Deferred revenues 60.1 47.3
------------- -------------
Total liabilities 1,134.7 1,106.7
------------- -------------

Commitments and contingencies

Stockholders' equity:
Preferred stock: Authorized, 25.0 shares;
issued and outstanding, none -- --
Common stock, $0.01 par value: Authorized,
650.0 shares; issued, 149.9 and 149.6
shares, respectively; outstanding, 123.6
and 123.7 shares, respectively 1.5 1.5
Additional paid-in capital 678.5 667.4
Retained earnings 639.1 642.2
Treasury stock -- at cost, 26.3 and 25.9
shares, respectively (538.3) (529.9)
Accumulated other comprehensive income 11.7 16.1
------------- -------------
Total stockholders' equity 792.5 797.3
------------- -------------

Total liabilities and stockholders' equity $ 1,927.2 $ 1,904.0
============= =============

Broadridge Financial Solutions, Inc.
Segment Results
(In millions)
(Unaudited)
Revenues
-------------------
Three Months Ended
September 30,
-------------------
2011 2010
--------- ---------
Investor Communication Solutions $ 313.0 $ 279.5
Securities Processing Solutions 158.4 141.7
Other -- --
Foreign currency exchange 5.0 0.2
--------- ---------
Total $ 476.4 $ 421.4
========= =========

Earnings (Loss) from
Continuing
Operations Before
Income Taxes
--------------------
Three Months Ended
September 30,
--------------------
2011 2010
--------- ---------
Investor Communication Solutions $ 8.4 $ 6.4
Securities Processing Solutions 27.8 20.9
Other (12.9) (8.0)
Foreign currency exchange 2.9 1.6
Total $ 26.2 $ 20.9
========= =========

Broadridge Financial Solutions, Inc.
Reconciliation of Non-GAAP to GAAP Measures
(In millions, except per share amounts)

Pre-Tax Margins
Three Months Ended
September 30,
--------------------
2011 2010
--------- ---------

Earnings from continuing operations before income
taxes (GAAP) $ 26.2 $ 20.9
IBM Migration costs 3.2 --
--------- ---------
Total (Non-GAAP) $ 29.4 $ 20.9
========= =========
Pre-tax margins (GAAP) 5.5% 5.0%
Pre-tax margins (Non-GAAP) 6.2% 5.0%

Net Earnings
Three Months Ended
September 30,
-------------------
2011 2010
--------- ---------

Net earnings from continuing operations (GAAP) $ 16.7 $ 13.3
IBM Migration costs, net of taxes 2.0 --
--------- ---------
Total (Non-GAAP) $ 18.7 $ 13.3
========= =========

Diluted Earnings
Per Share
Three Months Ended
September 30,
-------------------
2011 2010
--------- ---------

Diluted earnings per share from continuing operations
(GAAP) $ 0.13 $ 0.10
IBM Migration costs, net of taxes 0.02 -
--------- ---------
Total (Non-GAAP) $ 0.15 $ 0.10
========= =========

Broadridge Financial Solutions, Inc.
Reconciliation of Non-GAAP to GAAP Measures
EBIT Reconciliation
(In millions)

Q1 FY12 FY12 Guidance Range
Actual Low High
------------ ------------ ------------

Earnings from continuing
operations before interest and
income taxes (Non-GAAP) $ 31.6 $ 323 $ 343
============ ============ ============
Margins 6.6% 13.6% 14.3%

Interest & Other (2.2) (17) (17)
------------ ------------ ------------

Earnings from continuing
operations before income taxes
(Non-GAAP) $ 29.4 $ 306 $ 326
============ ============ ============
Margins 6.2% 12.9% 13.6%

IBM Migration costs (3.2) (33) (33)
------------ ------------ ------------

Earnings from continuing
operations before income taxes
(GAAP) $ 26.2 $ 273 $ 293
============ ============ ============
Margins 5.5% 11.5% 12.2%

Broadridge Financial Solutions, Inc.
Reconciliation of Non-GAAP to GAAP Measures
Fiscal Year 2012 Guidance
(In millions, except per share amounts)

FY12 Guidance Range
Low High
Earnings from continuing operations before income
taxes (GAAP) $ 273 $ 293

IBM Migration costs 33 33
--------- ---------

Earnings from continuing operations before income
taxes (Non-GAAP) $ 306 $ 326
========= =========

Pre-tax margins (GAAP) 11.5% 12.2%
Pre-tax margins (Non-GAAP) 12.9% 13.6%

FY12
Guidance Range
Low High
Diluted EPS from continuing operations (GAAP) $ 1.34 $ 1.44

IBM Migration costs, net of taxes 0.16 0.16
--------- ---------

Diluted EPS from continuing operations (Non-GAAP) $ 1.50 $ 1.60
========= =========

Broadridge Financial Solutions, Inc.
Reconciliation of Non-GAAP to GAAP Measures
Free Cash Flow
(In millions)
FY12
Q1 FY12 Guidance Range (a)
Actual Low High
--------- --------- ---------

Net earnings from continuing operations
(GAAP) $ 17 $ 172 $ 184
Depreciation and amortization (includes
other long-term assets) 21 95 100
Stock-based compensation expense 6 31 31
Other (6) (5) 5
--------- --------- ---------
Subtotal 37 293 320

Working capital changes (12) (15) (15)
Long-term assets and liabilities changes
(b) (2) (55) (45)
--------- --------- ---------

Net cash flow provided by continuing
operating activities 23 223 260

Cash Flows From Investing Activities
IBM/ITO data center investment (1) (15) (10)
Penson -- (7) (7)
Capital expenditures and software
purchases (5) (65) (55)
--------- --------- ---------

Free cash flow (Non-GAAP) (c) $ 17 $ 136 $ 188
========= ========= =========

(a) Guidance does not take into consideration the effect of any future
acquisitions, additional debt and/or share repurchases in excess of the
repurchases needed to achieve our 128 million diluted weighted-average
outstanding shares guidance.

(b) Includes IBM Migration costs of $(2)M and ~ $(33)M for Q1FY12 actual and
FY12 guidance, respectively.

(c) FY12 range presented in this table includes the impact of ~ $(73)M of
IBM Migration costs. When the IBM Migration costs are excluded from the
FY12 range, free cash flow would be ~ $210M to ~ $260M, with the mid-point
of ~ $235M.

Contact Information
Investors:
Rick Rodick
Broadridge Financial Solutions, Inc.
Vice President, Investor Relations
(516) 472-5474

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