<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
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Date of Report (Date of earliest event reported):
January 25, 2000
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CERIDIAN CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 1-1969 52-0278528
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) 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
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Item 5. OTHER EVENTS.
On January 25, 2000, the Registrant issued a press release
reporting its fourth quarter and full year 1999 earnings results, major U.S.
payroll initiatives and investments resulting in lowered expectations for
2000, and Mr. Lawrence Stranghoener, Executive Vice President and Chief
Financial Officer, accepting a position with an emerging technology company,
a copy of which is annexed hereto as Exhibit 99.1.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
c. EXHIBITS
99.1 Ceridian Corporation News Release dated January 25,
2000 reporting fourth quarter and full year 1999
earnings results, major U.S. payroll initiatives
and investments resulting in lowered expectations for
2000, and Mr. Lawrence Stranghoener, Executive Vice
President and Chief Financial Officer, accepting a
position with an emerging technology company.
2
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SIGNATURES
Pursuant to the requirements of the Securities 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
/s/ GARY M. NELSON
----------------------------------------------
Gary M. Nelson
Vice President, General Counsel and Secretary
Dated: January 25, 2000
3
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Item Method of Filing
- ----------- ------ -------------------
<S> <C> <C>
99.1 Ceridian Corporation News Release Filed electronically
dated January 25, 2000 reporting
fourth quarter and full year 1999
earnings results, major U.S. payroll
initiatives and investments resulting in
lowered expectations for 2000, and
Mr. Lawrence Stranghoener, Executive Vice
President and Chief Financial Officer,
accepting a position with an emerging
technology company.
</TABLE>
4
<PAGE>
NEWS RELEASE [LOGO]
Trish Scorpio
Media Relations
612/853-4717
CERIDIAN REPORTS 1999 RESULTS AND MAJOR NEW U.S. PAYROLL INITIATIVES
Ceridian Meets 1999 Expectations; Announces Major U.S. Payroll Initiatives and
Investments Resulting in Lowered Expectations for 2000
Ceridian Also Announces Stranghoener Accepts Offer With
Emerging Technology Company
MINNEAPOLIS, January 25, 2000 -- Ceridian Corporation (NYSE: CEN) today reported
fourth quarter and full year 1999 earnings. All earnings per share figures
reflect a stock split that was announced on January 20, 1999 and took effect on
February 10, 1999.
Fourth quarter 1999 net earnings were $36.5 million, or $.25 per diluted share
of common stock, on revenue of $361.4 million. These results were in line with
estimates provided by the Company in October. This includes about $.03 per share
dilutive effect from the June 1999 acquisition of Ceridian Benefit Services
(formerly ABR Information Services). Fourth quarter 1999 cash earnings per share
(defined as net income plus amortization of goodwill and other intangibles
related to acquisitions) were $.32. Fourth quarter 1998 earnings, without regard
to unusual gains from sales of a parcel of land and certain businesses and from
the sale of a discontinued operation, were $39.8 million, or $.27 per diluted
share of common stock on revenue of $309.6 million.
Full year 1999 net earnings were $148.9 million, or $1.01 per diluted share, on
revenue of $1,342.3 million. This includes almost $.07 per share dilutive effect
from the acquisition of Ceridian Benefits Services. Cash earnings per share
during 1999 were $1.23. Full year 1998 earnings, excluding the unusual fourth
quarter gains, were $140.1 million, or $.95 per diluted share, on revenue of
$1,162.1 million.
"Most of Ceridian's businesses performed very well in 1999 and are expected to
do so again in 2000," said Ronald L. Turner, president and chief executive
officer of Ceridian. "During 2000, we have decided to undertake certain
initiatives and make investments in the future of our U.S. payroll business
unit, and as a result, we are anticipating our earnings per share in 2000 will
be flat to modestly up compared to 1999. These initiatives and investments
include the transition of small business customers to Powerpay, our
Internet-based payroll product; major improvements in our customer service
model; changes in our pricing strategy; product enhancements; investments in Six
Sigma; and the consolidation of payroll processing centers. While these
initiatives will dampen our revenue and earnings expectations for 2000,
particularly for the first half of the year, we anticipate these initiatives
will result in accelerated earnings and revenue growth beginning in the last
part of 2000 and throughout 2001.
(more)
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"We also expect, as we undertake these initiatives, to take a one-time charge in
2000 in the range of $35 million to $50 million for costs associated with making
improvements in our customer service model, streamlining the organization, and
reducing levels of management as well as the number of payroll processing
centers," Turner added. "The initiatives and investments we are undertaking will
greatly enhance Ceridian's focus on operational excellence and customer service,
which are the keys to a successful service business.
"We believe Ceridian's current stock price significantly understates the
intrinsic value of our businesses," said Turner. "We remain committed to
increasing shareholder value and will continue to explore and evaluate all
appropriate options, with all of our businesses, to realize the value in
Ceridian."
Ceridian also announced that John R. (Jack) Eickhoff will now continue as
executive vice president and chief financial officer, a position he has held at
Ceridian for seven years. In December, Ceridian announced that Lawrence (Larry)
Stranghoener would become chief financial officer in January. He has now decided
to accept an offer to take a substantial equity position in an emerging
technology company and will become the chief financial officer of that company.
The advent of the year 2000 was a non-event for Ceridian customers and
employees. "Ceridian was completely prepared for Y2K," said Turner. "As a
result, the Company had no significant Y2K related incidents or difficulties.
All of our production systems and internal systems were Y2K ready, and our
customers experienced seamless transitions into the new year."
Ceridian continues to use the Internet to expand its presence in the small
business market and recently announced a new partnership with Simpata, Inc., an
Internet application service provider specializing in employee HR, benefits and
payroll administration for small and medium-sized businesses. Powerpay.com, a
Ceridian company, will make its Powerpay Internet-based payroll services
available to Simpata customers, and Simpata will make its complete HR and
benefits administration solution available to Powerpay.com's customers.
Comdata continues to extend its transaction processing expertise to a variety
of non-transportation markets via its Comchek-Registered Trademark- eCash
debit card. A growing number of major retailers, including JCPenney and
Kmart, are taking advantage of the private-label electronic retail cash cards
from the Stored Value Systems unit. These cards are used primarily as
promotional tools and replacements for paper gift certificates.
Arbitron, which continued to successfully test its portable people meter (PPM)
in the UK during the quarter, will complete the UK test March 1 and plans to
demo the revolutionary audience measurement device in a U.S. market later in
2000. Whereas the diary measurement system Arbitron has traditionally used
measures only radio listening, the PPM is a single-source, multi-media tool that
is capable of measuring radio, TV, cable, internet streaming, and satellite
audiences.
(more)
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Ceridian Corporation (www.ceridian.com) is a leading information services
company that serves the human resources, transportation and media information
markets. Ceridian's human resources businesses offer HR/benefits solutions that
support organizations' complete employment life cycle and maximize their
investment in people. Its Comdata business is a provider of transaction
processing and information services to the transportation and other industries,
and its media services business, Arbitron, is a research company serving the
media industry.
THIS PRESS RELEASE CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. THE STATEMENTS REGARDING
CERIDIAN CORPORATION CONTAINED IN THIS REPORT THAT ARE NOT HISTORICAL IN NATURE,
PARTICULARLY THOSE THAT UTILIZE TERMINOLOGY SUCH AS "MAY," "WILL," "SHOULD,"
"LIKELY," "EXPECTS," "ANTICIPATES," "ESTIMATES," "BELIEVES" OR "PLANS," OR
COMPARABLE TERMINOLOGY, ARE FORWARD-LOOKING STATEMENTS BASED ON CURRENT
EXPECTATIONS AND ASSUMPTIONS, AND ENTAIL VARIOUS RISKS AND UNCERTAINTIES THAT
COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED IN SUCH
FORWARD-LOOKING STATEMENTS. IMPORTANT FACTORS KNOWN TO CERIDIAN THAT COULD CAUSE
SUCH MATERIAL DIFFERENCES ARE IDENTIFIED AND DISCUSSED FROM TIME TO TIME IN
CERIDIAN'S FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION, INCLUDING THOSE
FACTORS DISCUSSED ON PAGES 15 THROUGH 17 OF CERIDIAN'S 1998 ANNUAL REPORT TO
STOCKHOLDERS, WHICH IS INCORPORATED BY REFERENCE INTO PART II, ITEM 7 OF
CERIDIAN'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1998,
WHICH DISCUSSION IS ALSO INCORPORATED HEREIN BY REFERENCE.
SUCH IMPORTANT FACTORS INCLUDE INTEREST RATE CHANGES AND INVESTMENT INCOME FROM
CUSTOMER DEPOSITS, EFFORTS TO EXPAND THE FLEET SERVICES (LOCAL FUELING) MARKET,
ABILITY TO INCREASE REVENUE FROM CROSS-SELLING EFFORTS AND NEW PRODUCTS, ABILITY
TO IMPROVE OPERATING MARGINS IN HUMAN RESOURCE SERVICES ("HRS"), CUSTOMER
RETENTION (PARTICULARLY IN HRS), EFFECTING SYSTEM UPGRADES AND CONVERSIONS,
CUSTOMER DECISION MAKING RELATED TO THE YEAR 2000 EVENT, ABILITY TO ADAPT TO
CHANGING TECHNOLOGY, ACQUISITION RISKS (INCLUDING INTEGRATION OF RECENT AND
FUTURE ACQUISITIONS AND OBTAINING ANTICIPATED REVENUE SYNERGIES OR COST
REDUCTIONS), COMPETITIVE CONDITIONS, IMPLEMENTATION AND SUCCESS OF PLANS
INVOLVING OUR U.S. PAYROLL BUSINESS, AND OTHER FACTORS SUCH AS TRADE, MONETARY
AND FISCAL POLICIES AND POLITICAL AND ECONOMIC CONDITIONS.
(more)
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CONSOLIDATED STATEMENTS OF OPERATIONS Ceridian Corporation
(Dollars in millions, except per share data) and Subsidiaries
<TABLE>
<CAPTION>
For Periods Ended December 31,
Current Quarter Year to Date
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Revenue $ 361.4 $ 309.6 $1,342.3 $1,162.1
Costs and Expenses
Cost of revenue 174.8 150.4 630.5 551.5
Selling, general and
administrative 98.7 78.5 379.6 316.0
Research and development 19.9 20.0 74.4 77.8
Other expense (income) - (9.2) 1.1 (6.8)
Total costs and expenses 293.4 239.7 1,085.6 938.5
Earnings before interest
and taxes 68.0 69.9 256.7 223.6
Interest income 1.1 2.5 6.4 10.4
Interest expense (10.1) (1.0) (24.7) (4.3)
Earnings before
income taxes 59.0 71.4 238.4 229.7
Income tax provision 22.5 7.3 89.5 65.3
Earnings from continuing
operations $ 36.5 $ 64.1 $ 148.9 $ 164.4
Discontinued operations - 25.4 - 25.4
Net earnings $ 36.5 $ 89.5 $ 148.9 $ 189.8
Basic earnings per share
Continuing operations $ 0.25 $ 0.45 $ 1.03 $ 1.14
Net earnings $ 0.25 $ 0.62 $ 1.03 $ 1.32
Diluted earnings per share
Continuing operations $ 0.25 $ 0.44 $ 1.01 $ 1.11
Net earnings $ 0.25 $ 0.61 $ 1.01 $ 1.29
Shares used in calculations
(in thousands)
Weighted average
shares (basic) 144,676 143,234 144,524 144,070
Other dilutive securities 1,082 3,920 3,440 3,527
Total (diluted) 145,758 147,154 147,964 147,597
</TABLE>
(more)
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CONDENSED CONSOLIDATED BALANCE SHEETS Ceridian Corporation
(Unaudited) and Subsidiaries
(Dollars in millions)
<TABLE>
<CAPTION>
December 31, December 31,
1999 1998
<S> <C> <C>
Cash and equivalents $ 59.4 $ 101.8
Receivables 460.4 384.5
Other assets 1,540.1 803.4
Total assets $ 2,059.9 $ 1,289.7
Debt $ 611.3 $ 54.5
Other liabilities 605.9 584.6
Stockholders' equity 842.7 650.6
Total liabilities and
stockholders' equity $ 2,059.9 $ 1,289.7
</TABLE>
[LOGO]
Revenue Comparisons
Actual
($M)
<TABLE>
<CAPTION>
Fourth Quarter Twelve Months YTD
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Human Resources Services $222.7 $191.4 $ 828.0 $ 700.3
Arbitron 57.0 51.6 215.4 194.5
Comdata Corporation
Transportation 81.7 66.6 298.9 261.5
Gaming 0.0 0.0 0.0 5.8
Total $361.4 $309.6 $1,342.3 $1,162.1
</TABLE>
(more)
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CONSOLIDATED STATEMENTS OF OPERATIONS (Pro Forma)
(Unaudited) Ceridian Corporation
(Dollars in millions, except per share data) and Subsidiaries
<TABLE>
<CAPTION>
For Periods Ended December 31,
Current Quarter Year to Date
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Revenue $ 361.4 $ 309.6 $1,342.3 $1,162.1
Costs and Expenses
Cost of revenue 174.8 150.4 630.5 551.5
Selling, general and
administrative 98.7 78.5 379.6 316.0
Research and development 19.9 20.0 74.4 77.8
Other expense (income) (1) - - 1.1 2.4
Total costs and expenses 293.4 248.9 1,085.6 947.7
Earnings before interest
and taxes 68.0 60.7 256.7 214.4
Interest income 1.1 2.5 6.4 10.4
Interest expense (10.1) (1.0) (24.7) (4.3)
Earnings before
income taxes 59.0 62.2 238.4 220.5
Income tax provision (2) 22.5 22.4 89.5 80.4
Earnings from continuing
operations (3) $ 36.5 $ 39.8 $ 148.9 $ 140.1
Diluted earnings per share $ 0.25 $ 0.27 $ 1.01 $ 0.95
Shares used in calculations
(in thousands) 145,758 147,154 147,964 147,597
</TABLE>
FOOTNOTES
(1) Excludes 1998 unusual gains of $24.3 related to the sale of land and
businesses.
(2) Excludes 1998 net tax benefit from sales of land and businesses, primarily
Tesseract.
(3) Only earnings from continuing operations are presented. The $25.4 additional
after-tax gain in the fourth quarter of 1998 from the December 1997 sale of
the discontinued operations of Computing Devices is thereby excluded.
(more)
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FOURTH QUARTER 1998 PRO FORMA ADJUSTMENTS
CONSOLIDATED STATEMENTS OF OPERATIONS (Pro Forma)
(Unaudited) Ceridian Corporation
(Dollars in millions, except per share data) and Subsidiaries
<TABLE>
<CAPTION>
Quarter Ended December 31, 1998
Disc. Unusual As
Pro Forma Ops. Gains Reported
<S> <C> <C> <C> <C>
Revenue $ 309.6 $ - $ - $ 309.6
Costs and Expenses
Cost of revenue 150.4 - - 150.4
Selling, general and
administrative 78.5 - - 78.5
Research and development 20.0 - - 20.0
Other expense (income) - - (9.2) (9.2)
Total cost and expenses 248.9 - (9.2) 239.7
Earnings before interest
and taxes 60.7 - 9.2 69.9
Interest income 2.5 - - 2.5
Interest expense (1.0) - - (1.0)
Earnings before income taxes 62.2 - 9.2 71.4
Income tax provision 22.4 - (15.1) 7.3
Earnings from continuing
operations 39.8 - 24.3 64.1
Discontinued operations - 25.4 - 25.4
Net earnings $ 39.8 $ 25.4 $ 24.3 $ 89.5
Diluted earnings per share
Continuing operations $ 0.27 $ 0.44
Net earnings $ 0.27 $ 0.61
Shares used in calculations
(in thousands) 147,154 147,154
</TABLE>
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