UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________________________________
FORM
_________________________________________
For the Quarterly Period Ended
OR
For the Transition Period From __________to __________
Commission file number
_________________________________________
(
A
IRS Employer Identification Number:
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class | Trading Symbol(s) | Name of each exchange of which registered |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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| Accelerated Filer |
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| Smaller Reporting Company | |
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| Emerging Growth Company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No
As of September 30, 2019,
PAYCHEX, INC.
Table of Contents
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Management’s Discussion and Analysis of Financial Condition and Results of Operations | 25 | |
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
PAYCHEX, INC.
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED)
In millions, except per share amounts
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| August 31, | ||||
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| 2018 | ||
Revenue: |
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Management Solutions |
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PEO and Insurance Services |
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Total service revenue |
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Interest on funds held for clients |
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Total revenue |
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Expenses: |
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Operating expenses |
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Selling, general and administrative expenses |
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Total expenses |
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Operating income |
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Other (expense)/income, net |
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Income before income taxes |
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Income taxes |
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Net income |
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Other comprehensive income, net of tax |
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Comprehensive income |
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Basic earnings per share |
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Diluted earnings per share |
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Weighted-average common shares outstanding |
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Weighted-average common shares outstanding, |
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See Notes to Consolidated Financial Statements.
PAYCHEX, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
In millions, except per share amounts
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| August 31, |
| May 31, | ||
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Assets |
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Cash and cash equivalents |
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Restricted cash |
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Corporate investments |
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Interest receivable |
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Accounts receivable, net of allowance for doubtful accounts |
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PEO unbilled receivables, net of advance collections |
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Prepaid income taxes |
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Prepaid expenses and other current assets |
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Current assets before funds held for clients |
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Funds held for clients |
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Total current assets |
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Long-term restricted cash |
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Long-term corporate investments |
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Property and equipment, net of accumulated depreciation |
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Operating lease right-of-use assets, net of accumulated amortization |
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Intangible assets, net of accumulated amortization |
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Goodwill |
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Long-term deferred costs |
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Other long-term assets |
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Total assets |
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Liabilities |
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Accounts payable |
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Accrued corporate compensation and related items |
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Accrued worksite employee compensation and related items |
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Accrued income taxes |
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Short-term borrowings |
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Deferred revenue |
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Other current liabilities |
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Current liabilities before client fund obligations |
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Client fund obligations |
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Total current liabilities |
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Accrued income taxes |
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Deferred income taxes |
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Long-term borrowings, net of debt issuance costs |
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Operating lease liabilities |
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Other long-term liabilities |
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Total liabilities |
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Commitments and contingencies — Note N |
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Stockholders’ equity |
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Common stock, $ |
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Additional paid-in capital |
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Retained earnings |
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Accumulated other comprehensive income |
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity |
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See Notes to Consolidated Financial Statements.
PAYCHEX, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)
In millions, except per share amounts
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| For the three months ended August 31, 2019 | |||||||||||||||
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| Accumulated |
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| Additional |
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| other |
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| Common stock |
| paid-in |
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| comprehensive |
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| Shares |
| Amount |
| capital |
| earnings |
| income/(loss) |
| Total | |||||
Balance as of May 31, 2019 |
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Net income |
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Unrealized gains on securities, net of reclassification adjustment and tax |
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Cash dividends declared ($ |
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Repurchases of common shares |
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Stock-based compensation costs |
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Foreign currency translation adjustment |
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Activity related to equity-based plans |
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Balance as of August 31, 2019 |
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| For the three months ended August 31, 2018 | |||||||||||||||
Balance as of May 31, 2018 |
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Net income |
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Unrealized gains on securities, net of reclassification adjustment and tax |
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Cash dividends declared ($ |
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Repurchases of common shares |
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Stock-based compensation costs |
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Foreign currency translation adjustment |
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Activity related to equity-based plans |
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Balance as of August 31, 2018 |
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See Notes to Consolidated Financial Statements.
PAYCHEX, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
In millions
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| For the three months ended | ||||
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| 2018 (1) | ||
Operating activities |
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Net income |
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Adjustments to reconcile net income to net cash provided by operating activities: |
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Depreciation and amortization on property and equipment and intangible assets |
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Amortization of premiums and discounts on available-for-sale securities, net |
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Amortization of deferred contract costs |
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Stock-based compensation costs |
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(Benefit)/provision for deferred income taxes |
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Provision for allowance for doubtful accounts |
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Net realized (gains)/losses on sales of available-for-sale securities |
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Changes in operating assets and liabilities: |
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Interest receivable |
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Accounts receivable and PEO unbilled receivables, net |
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Prepaid expenses and other current assets |
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Accounts payable and other current liabilities |
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Deferred costs |
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Net change in other long-term assets and liabilities |
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Net change in operating lease right-of-use assets and liabilities |
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Net cash provided by operating activities |
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Investing activities |
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Purchases of available-for-sale securities |
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Proceeds from sales and maturities of available-for-sale securities |
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Purchases of property and equipment |
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Purchases of other assets |
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Net cash provided by investing activities |
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Financing activities |
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Net change in client fund obligations |
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Net proceeds from short-term borrowings |
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Dividends paid |
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Repurchases of common shares |
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Activity related to equity-based plans |
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Net cash used in financing activities |
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Net change in cash, cash equivalents, restricted cash and restricted cash equivalents |
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Cash, cash equivalents, restricted cash and restricted cash equivalents, beginning of period |
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Cash, cash equivalents, restricted cash and restricted cash equivalents, end of period |
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Reconciliation of cash, cash equivalents, restricted cash and restricted cash equivalents |
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to the Consolidated Balance Sheets: |
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Cash and cash equivalents |
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Restricted cash |
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Restricted cash and restricted cash equivalents included in funds held for clients |
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