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EXHIBIT 99.1
| News Release | LOGO |
| Trish Scorpio | ||
| Ceridian Corporation | ||
| 612/853-4717 |
Ceridian Meets Third Quarter Earnings Expectations
Arbitron Spin and Human Resources Recovery Are on Track
—Earnings Outlook for 2000
Unchanged—
Third Quarter Highlights:
MINNEAPOLIS, October 17, 2000—Ceridian Corporation (NYSE: CEN) met expectations by announcing diluted earnings per share of $.23 and cash earnings per share of $.31 for the third quarter 2000. Third quarter revenues of $204.3 million for its Human Resources business segment were lower than expected. Ceridian expects full year 2000 revenues for its Human Resources business segment to be in the range of $865 million to $870 million.
"We continue to be encouraged by the progress being made in this transition year," said Ronald L. Turner, chairman, president and chief executive officer of Ceridian. "We are confident that the initiatives we have undertaken to rebuild our U.S. payroll business are starting to pay off, and we have been able to effectively manage our expenses. Customer satisfaction showed a tremendous improvement this quarter, and customer retention for the quarter again exceeded our expectations. Market conditions remain strong, and customer and prospect response to the recently released Source 500 (Version 7.0) product is positive. Even though top line revenues are less than we had hoped, we are on track with all initiatives announced earlier this year, and we expect to meet our earnings expectations for the year.
"The spin-off transaction splitting Ceridian Corporation and Arbitron into two independent, publicly-traded companies is progressing according to plan and is expected to be completed by the end of the year," added Turner. "After the transaction, Ceridian will be comprised of its Human Resources businesses and the Comdata business. As a result, effective for the third quarter 2000 reporting, Ceridian is presenting Arbitron as a discontinued operation in our financial reports."
Third quarter 2000 net earnings amounted to $33.9 million, or $.23 per diluted share of common stock, compared to third quarter 1999 net earnings of $34.9 million, or $.24 per diluted common share. Cash earnings per share (which excludes acquisition amortization) for the current quarter were $.31 compared to $.30 for the same quarter in 1999.
Net earnings for the first nine months of 2000 (excluding the first quarter special charges) were $101.6 million, or $.69 per diluted share, compared to $112.4 million, or $.76 per diluted share for the comparable 1999 period. Cash earnings per share (which excludes acquisition amortization and the first quarter special charges) for the 2000 year-to-date period were $.93 compared to $.91 for the comparable 1999 period.
On a pro forma basis without the first quarter special charges and after effecting the spin-off financing and an increased effective tax rate as of January 1, 2000, earnings from continuing operations would be $21.9 million, or $.15 per diluted share, for third quarter 2000, and $67.9 million, or $.46 per diluted share, for the nine months ended September 30, 2000.
During the quarter, Ceridian also continued to expand the overall distribution of its Internet-based payroll product, Powerpay.com, with the announcement of important distribution arrangements with Chase Manhattan Bank and The Principal Financial Group.
Comdata had a strong third quarter, with margins exceeding 29 percent. Comdata sold its phone resale business effective July 1, 2000, which reduced its revenues on a comparable basis. During the third quarter, Comdata continued to expand its presence in the local fueling market. Notable new customers for Comdata's local fleet include Frito-Lay and SYSCO Corporation.
During the quarter, Ceridian announced that Arbitron will realign its organization, effective January 1, 2001, to focus on three key business areas: U.S. media services, portable people meters and Webcast ratings. This action will further strengthen the management team by establishing three operating groups within Arbitron, each reporting to Stephen Morris, who will become Arbitron's chief executive officer upon completion of the spin transaction.
Arbitron's first U.S. field test of its portable people meter (PPM) is proceeding according to plan. The initial deployment of 300 meters is planned to take place beginning late in the fourth quarter of 2000 in the Wilmington, Delaware radio metro which is part of the larger Philadelphia area. Late in 2001, Arbitron plans to begin to increase the sample to cover the full Philadelphia market. Nielsen Media Research is providing financial and technical support and its television research experience for the test, and has the option to join Arbitron in the future commercial deployment of the PPM in the U.S.
Arbitron's efforts to measure the audiences of audio and video content on the Internet are also continuing as planned. Arbitron is expected to begin marketing the Arbitron Webcast Ratings service (formerly called InfoStream) during the first quarter of 2001.
Ceridian Corporation (www.ceridian.com) is a leading information services company that serves the human resources, transportation and media information markets. Ceridian's human resource business offers HR/benefits solutions that help organizations 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.
NOTE: Investors are invited to listen to Ceridian Corporation's third quarter earnings conference live via the Internet at 10 a.m. (EDT) on Tuesday, October 17, 2000. The Webcast can be accessed through the Investor Relations section of Ceridian's Website at www.ceridian.com, or directly at: http://www.ceridian.com/invest audio.asp. An audio replay of the conference call will be available at the above Internet address until January, 2001.
2
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 include, among others:
Additional 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 18 of Ceridian's 1999 Annual Report to Stockholders, which is incorporated by reference into Item 7 of Ceridian's Annual Report on Form 10-K for the year ended December 31, 1999, which discussion is also incorporated herein by reference.
Ceridian undertakes no obligation to correct or update any forward-looking statements, whether as a result of new information, future events or otherwise. You are advised, however, to consult any future disclosure Ceridian makes on related subjects in future reports to the SEC.
3
Schedule A
Ceridian Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in millions, except per share data)
(Unaudited)
| |
For Periods Ended September 30, |
||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| |
Current Quarter |
Year to Date |
|||||||||||||
| |
2000 |
1999 |
2000 |
1999 |
|||||||||||
| Revenue | $ | 279.3 | $ | 283.0 | $ | 872.0 | $ | 822.5 | |||||||
| Costs and Expenses | |||||||||||||||
| Cost of revenue | 135.4 | 140.5 | 424.8 | 399.5 | |||||||||||
| Selling, general and administrative | 84.4 | 82.6 | 267.9 | 244.1 | |||||||||||
| Research and development | 15.8 | 14.2 | 46.1 | 45.3 | |||||||||||
| Other expense (income) | 0.8 | (1.6 | ) | 32.2 | (1.8 | ) | |||||||||
| Total costs and expenses | 236.4 | 235.7 | 771.0 | 687.1 | |||||||||||
| Earnings before interest and taxes |
|
|
42.9 |
|
|
47.3 |
|
|
101.0 |
|
|
135.4 |
|
||
| Interest income |
|
|
1.0 |
|
|
1.6 |
|
|
2.8 |
|
|
5.3 |
|
||
| Interest expense | (10.4 | ) | (10.5 | ) | (29.9 | ) | (14.6 | ) | |||||||
| Earnings before income taxes |
|
|
33.5 |
|
|
38.4 |
|
|
73.9 |
|
|
126.1 |
|
||
| Income tax provision |
|
|
13.3 |
|
|
15.2 |
|
|
28.7 |
|
|
47.1 |
|
||
| Earnings from continuing operations |
|
|
20.2 |
|
|
23.2 |
|
|
45.2 |
|
|
79.0 |
|
||
| Discontinued operations |
|
|
13.7 |
|
|
11.7 |
|
|
37.7 |
|
|
33.4 |
|
||
| Net earnings |
|
$ |
33.9 |
|
$ |
34.9 |
|
$ |
82.9 |
|
$ |
112.4 |
|
||
| Basic earnings per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
| Continuing operations | $ | 0.14 | $ | 0.16 | $ | 0.31 | $ | 0.55 | |||||||
| Net earnings | $ | 0.23 | $ | 0.24 | $ | 0.57 | $ | 0.78 | |||||||
| Diluted earnings per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
| Continuing operations | $ | 0.14 | $ | 0.16 | $ | 0.31 | $ | 0.53 | |||||||
| Net earnings | $ | 0.23 | $ | 0.24 | $ | 0.57 | $ | 0.76 | |||||||
| Shares used in calculations (in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
| Weighted average shares (basic) | 145,380 | 144,743 | 145,073 | 144,472 | |||||||||||
| Dilutive securities | 2,150 | 2,673 | 1,399 | 4,057 | |||||||||||
| Weighted average shares (diluted) | 147,530 | 147,416 | 146,472 | 148,529 | |||||||||||
4
Schedule A (continued)
Ceridian Corporation and Subsidiaries
SUPPLEMENTARY FINANCIAL INFORMATION
CASH EARNINGS PER SHARE
(Not including unusual gains or losses or amortization of acquisition cost)
| |
Current Quarter |
Year to Date |
||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| |
2000 |
1999 |
2000 |
1999 |
||||||||
| Pro forma net earnings | $ | 33.9 | $ | 34.9 | $ | 101.6 | $ | 112.4 | ||||
| Amortization of acquisition cost, net of income taxes | 12.5 | 9.0 | 34.5 | 22.4 | ||||||||
| Pro forma cash earnings | 46.4 | 43.9 | 136.1 | 134.8 | ||||||||
| Cash earnings per share (diluted) | $ | 0.31 | $ | 0.30 | $ | 0.93 | $ | 0.91 | ||||
5
Schedule B
Ceridian Corporation and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in millions)
| |
September 30, 2000 |
December 31, 1999 |
|||||
|---|---|---|---|---|---|---|---|
| Cash and equivalents | $ | 101.3 | $ | 58.5 | |||
| Trade receivables | 439.8 | 399.0 | |||||
| Other receivables | 23.2 | 23.8 | |||||
| Other assets | 1,600.3 | 1,513.9 | |||||
| Total assets | $ | 2,164.6 | $ | 1,995.2 | |||
| Debt |
|
$ |
555.8 |
|
$ |
611.3 |
|
| Drafts and customer funds payable | 192.9 | 136.9 | |||||
| Other liabilities | 459.6 | 404.3 | |||||
| Stockholders' equity | 956.3 | 842.7 | |||||
| Total liabilities and stockholders' equity | $ | 2,164.6 | $ | 1,995.2 | |||
The net assets of the discontinued operations of Arbitron are included in other assets.
6
Schedule C
Ceridian Corporation and Subsidiaries
Revenue Comparisons
Actual
($M)
| |
Third Quarter |
Nine Months YTD |
||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| |
2000 |
1999 |
2000 |
1999 |
||||||||
| Human Resource Services | $ | 204.3 | $ | 208.0 | $ | 646.3 | $ | 605.3 | ||||
| Comdata Corporation | 75.0 | 75.0 | 225.7 | 217.2 | ||||||||
| Total |
|
$ |
279.3 |
|
$ |
283.0 |
|
$ |
872.0 |
|
$ |
822.5 |
Ceridian Corporation and Subsidiaries
Earnings Before Interest and Tax Comparisons
Actual
($M)
| |
Third Quarter |
Nine Months YTD |
||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| |
2000 |
1999 |
2000 |
1999 |
||||||||
| Human Resource Services | $ | 20.5 | $ | 28.6 | $ | 37.8 | $ | 86.6 | ||||
| Comdata Corporation | 22.4 | 18.7 | 54.1 | 48.8 | ||||||||
| Other | 0.0 | 0.0 | 9.1 | 0.0 | ||||||||
| Total |
|
$ |
42.9 |
|
$ |
47.3 |
|
$ |
101.0 |
|
$ |
135.4 |
Ceridian Corporation and Subsidiaries
Earnings Before Interest and Tax Comparisons (Pro Forma)
Excluding First Quarter 2000 Special Charges
Actual
($M)
| |
Third Quarter |
Nine Months YTD |
||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| |
2000 |
1999 |
2000 |
1999 |
||||||||
| Human Resource Services | $ | 20.5 | $ | 28.6 | $ | 74.8 | $ | 86.6 | ||||
| Comdata Corporation | 22.4 | 18.7 | 56.7 | 48.8 | ||||||||
| Other | 0.0 | 0.0 | 0.0 | 0.0 | ||||||||
| Total |
|
$ |
42.9 |
|
$ |
47.3 |
|
$ |
131.5 |
|
$ |
135.4 |
7
Schedule D
Ceridian Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS (Pro Forma)
EXCLUDING FIRST QUARTER 2000 SPECIAL CHARGES
(Unaudited)
(Dollars in millions, except per share data)
| |
For Periods Ended September 30, 2000 |
|||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| |
Nine Months |
|||||||||||
| |
As Reported |
Unusual Charges |
Pro Forma |
|||||||||
| Revenue | $ | 872.0 | $ | 872.0 | ||||||||
| Costs and Expenses | ||||||||||||
| Cost of revenue | 424.8 | 424.8 | ||||||||||
| Selling, general and administrative | 267.9 | 267.9 | ||||||||||
| Research and development | 46.1 | 46.1 | ||||||||||
| Other expense (income) | 32.2 | $ | (30.5 | ) | 1.7 | |||||||
| Total costs and expenses | 771.0 | (30.5 | ) | 740.5 | ||||||||
| Earnings before interest and taxes |
|
|
101.0 |
|
|
30.5 |
|
|
131.5 |
|
||
| Interest income |
|
|
2.8 |
|
|
|
|
|
2.8 |
|
||
| Interest expense | (29.9 | ) | (29.9 | ) | ||||||||
| Earnings before income taxes |
|
|
73.9 |
|
|
30.5 |
|
|
104.4 |
|
||
| Income tax provision |
|
|
28.7 |
|
|
11.8 |
|
|
40.5 |
|
||
| Earnings from continuing operations |
|
|
45.2 |
|
|
18.7 |
|
|
63.9 |
|
||
| Discontinued operations |
|
|
37.7 |
|
|
|
|
|
37.7 |
|
||
| Net earnings |
|
$ |
82.9 |
|
$ |
18.7 |
|
$ |
101.6 |
|
||
| Diluted earnings per share |
|
|
|
|
|
|
|
|
|
|
||
| Continuing operations | $ | 0.31 | $ | 0.44 | ||||||||
| Net earnings | $ | 0.57 | $ | 0.69 | ||||||||
| Shares used in calculations (in thousands) |
|
|
|
|
|
|
|
|
|
|
||
| Weighted average shares (basic) | 145,073 | 145,073 | ||||||||||
| Dilutive securities | 1,399 | 1,399 | ||||||||||
| Weighted average shares (diluted) | 146,472 | 146,472 | ||||||||||
8
Schedule E
Ceridian Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS (Pro Forma)
EFFECTING THE SPIN-OFF AS OF 1/1/2000 AND EXCLUDING FIRST
QUARTER 2000 SPECIAL CHARGES
(Unaudited)
(Dollars in millions, except per share data)
| 2000 Quarterly Data |
Q1 |
Q2 |
Q3 |
TD |
|||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | $ | 309.6 | $ | 283.1 | $ | 279.3 | 872.0 | ||||||||
| Costs and Expenses | |||||||||||||||
| Cost of revenue | 148.3 | 141.1 | 135.4 | 424.8 | |||||||||||
| Selling, general and administrative | 95.3 | 88.2 | 84.4 | 267.9 | |||||||||||
| Research and development | 15.1 | 15.2 | 15.8 | 46.1 | |||||||||||
| Other expense (income)(1) | 0.6 | 0.3 | 0.8 | 1.7 | |||||||||||
| Total costs and expenses | 259.3 | 244.8 | 236.4 | 740.5 | |||||||||||
| Earnings before interest and taxes |
|
|
50.3 |
|
|
38.3 |
|
|
42.9 |
|
|
131.5 |
|
||
| Interest income |
|
|
1.0 |
|
|
0.8 |
|
|
1.0 |
|
|
2.8 |
|
||
| Interest expense(2) | (6.7 | ) | (6.3 | ) | (7.0 | ) | (20.0 | ) | |||||||
| Earnings before income taxes |
|
|
44.6 |
|
|
32.8 |
|
|
36.9 |
|
|
114.3 |
|
||
| Income tax provision(3) |
|
|
18.1 |
|
|
13.3 |
|
|
15.0 |
|
|
46.4 |
|
||
| Earnings from continuing operations |
|
|
26.5 |
|
|
19.5 |
|
|
21.9 |
|
|
67.9 |
|
||
| Diluted earnings per share |
|
$ |
0.18 |
|
$ |
0.13 |
|
$ |
0.15 |
|
$ |
0.46 |
|
||
| Shares used in calculations (in thousands) |
|
|
145,525 |
|
|
146,755 |
|
|
147,530 |
|
|
146,472 |
|
||
####
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