<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C., 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 19, 1995
CERIDIAN CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 1-1969 52-0278528
(State of other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
8100 34th Avenue South, Minneapolis, Minnesota 55425
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (612-853-8100)
(Former name or former address, if changed since last report)
<PAGE>
Item 5. Other Events.
Technology Services and Marketing Agreements with ISSC. In
January 1994, Ceridian Corporation (the ''
Company'') entered into
technology services and marketing agreements with Integrated Systems
Solutions Corporation (''
ISSC''), a wholly-owned subsidiary of
International Business Machines Corporation (''
IBM''). Under the
technology services agreement, whose term extends through December 31,
2004, ISSC will provide centralized computer processing services
required by the Company's Employer Services business for payroll
processing customers nationwide. All other aspects of the payroll
processing business will continue to be directly managed by Ceridian
Employer Services, including applications software development and
implementation and all production services such as laser printing,
distribution and customer service. Annual service charges payable by
the Company during the term of the agreement are expected to total
approximately $110 million, based on current expectations regarding
future system usage, and are subject to cost of living and other
adjustments.
The Company believes that the technology services agreement with
ISSC represents the fastest, most cost-effective and most
technologically sound and secure means for the Company to effect its
previously disclosed plans to consolidate the data processing portion
of its payroll processing activities that are currently conducted in
its thirty-one district offices. The other aspects of Employer
Services' payroll processing activities, such as the printing of
checks and reports, will continue to occur in its district offices.
Consolidation of the processing activities is expected to result in
significant savings to the Company over the term of the technology
services agreement, although the full benefit of such savings is not
expected to be realized during the transition from data processing in
district offices to processing in the ISSC center. The timing of this
transition will principally be determined by the timing of the
Company's introduction of its enhanced payroll processing software,
which will run in the ISSC center and which is based on the payroll
processing software which Tesseract Corporation (''
Tesseract''),
acquired by the Company in June 1994, provides to large customers
desiring in-house payroll processing. The Company expects that beta
testing of the enhanced software with selected new and existing
payroll processing customers will begin in mid-1995, that all new
customers and additional existing customers will begin utilizing the
enhanced software in the first quarter 1996, and that the transition
of the remainder of the existing customer base to the enhanced
software will begin in mid-1996 and continue for at least eighteen
months.
Under the marketing agreement, ISSC will remarket Employer
Services' payroll services and Tesseract software and services where
payroll software and services are required as part of a larger
information technology outsourcing project, and Employer Services will
jointly market with ISSC its information technology services where a
customer requires information technology outsourcing beyond Employer
Services' payroll services.
<PAGE>
Item 5. Other Events (cont.)
<PAGE>
Announcement of Financial Results for the Quarter and Year Ended
December 31, 1994. On January 24, 1995, the Company announced its
financial results for the quarter and year ended December 31, 1994.
The Company reported fourth quarter 1994 net earnings available to
common stockholders of $17.5 million, or $ .37 per fully diluted share
of common stock, on revenue of $234.1 million. For the fourth quarter
1993, on a comparable basis, the Company reported a net loss of $62.7
million, which included an $8.4 million extraordinary loss and a $67.0
million net restructuring loss. Apart from these losses, the
Company's fourth quarter 1993 earnings were $12.7 million, or $ .29
per common share.
For the year 1994, the Company reported net earnings available to
common stockholders of $65.6 million, or $ 1.40 per fully diluted
share of common stock, on revenue of $916.3 million. In 1993, on a
comparable basis, the Company reported a net loss of $30.7 million, or
$ .71 per common share, on revenue of $886.1 million.
.
. Excluding the
fourth quarter 1993 restructuring and extraordinary losses, the
Company would have reported earnings of $44.7 million, or $1.04 per
common share. The Company's consolidated statements of operations for
the three and twelve month periods ended December 31, 1993 and 1994,
as well as its condensed consolidated balance sheets at December 31,
1993 and 1994 are on the following pages.
<PAGE>
<TABLE>
<CAPTION>
<PAGE>
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in millions, Ceridian
Corporation
except per share data) and
Subsidiaries
For Periods Ended
December 31,
Three Months Twelve
Months
1994 1993 1994
1993
<S> <C> <C> <C> <C>
Revenue
Product sales $ 131.0 $ 119.1 $ 515.9 $
442.0
Services 103.1 107.8 400.4
444.1
Total 234.1 226.9 916.3
886.1
Cost of revenue
Product sales 96.8 94.6 401.3
353.1
Services 49.5 60.5 187.2
252.9
Total 146.3 155.1 588.5
606.0
Gross profit 87.8 71.8 327.8
280.1
Operating Expenses
Selling, general,
and administrative 57.2 47.9 205.5
178.1
Technical expense 13.1 11.4 49.3
48.6
Other expense (income) (2.5) (2.3) (3.2)
(3.5)
Restructure loss (gain) - 67.0 -
67.0
Earnings (Loss) before
interest and taxes 20.0 (52.2) 76.2
(10.1)
Interest income 2.8 2.6 10.6
8.3
Interest expense (.4) (4.2) (1.6)
(16.4)
Earnings (Loss) before income taxes 22.4 (53.8) 85.2
(18.2)
Income tax provision 1.6 .2 6.6
3.8
<PAGE>
Net earnings (loss) before
extraordinary item 20.8 (54.0) 78.6
(22.0)
Extraordinary loss - 8.4 -
8.4
Net earnings (loss) $ 20.8 $ (62.4)$ 78.6 $
(30.4)
Preferred stock dividends 3.3 .3 13.0
.3
Net earnings (loss) available to
common stockholders $ 17.5 $ (62.7)$ 65.6 $
(30.7)
Primary earnings (loss) per share $ .38 $ (1.43)$ 1.43 $
(.71)
Fully diluted earnings (loss) per share $ .37 $ (1.43)$ 1.40 $
(.71)
Weighted average common shares
and equivalents outstanding (000's):
Primary 46,017 43,844 45,865
43,131
Fully diluted 56,401 43,844 56,249
43,131
<PAGE>
<CAPTION>
CONDENSED CONSOLIDATED BALANCE SHEETS
Ceridian Corporation
(Dollars in millions) and Subsidiaries
December December
1994 1993
<S> <C> <C>
Cash and short-term investments $ 171.4 $ 215.8
Receivables 141.4 133.0
Inventories 25.8 30.9
All other assets 351.7 236.0
Total assets $ 690.3 $ 615.7
Debt $ 18.7 $ 19.4
All other liabilities 485.1 485.0
Stockholders' equity 186.5 111.3
Total liabilities and
stockholders' equity $ 690.3 $ 615.7
</TABLE>
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act
of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
CERIDIAN CORPORATION
Date: January 24, 1995 By: /S/Loren D. Gross
Vice President and
Corporate Controller
(Principal Accounting Officer)
