FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Quarterly Report Under Section 13 or 15(d) of
the Securities Exchange Act of 1934
(Mark One)
(x) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended November 30, 1995
-------------------------------
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
---------------- ----------------
For Quarter Ended November 30, 1995 Commission file number 0-11330
----------------- -------
PAYCHEX, INC.
- ---------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 16-1124166
-------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
911 PANORAMA TRAIL SOUTH, ROCHESTER, NEW YORK 14625-0397
- ----------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code) (716)385-6666
------------
- ----------------------------------------------------------------------
(Former name, former address and former fiscal year, if
changed since last report.)
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 x . NO .
----- -----
CLASS OUTSTANDING AT November 30,1995
- ------------------------------ -----------------------------------
(Common Stock, $.01 Par Value) (45,583,512 Shares)
<PAGE>
PAYCHEX, INC. AND SUBSIDIARIES
INDEX
PART I. FINANCIAL INFORMATION PAGE
- ------------------------------ ----
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
CONSOLIDATED BALANCE SHEETS - NOVEMBER 30, 1995 AND
MAY 31, 1995 3-4
CONSOLIDATED STATEMENTS OF INCOME - THREE AND SIX
MONTHS ENDED NOVEMBER 30, 1995 AND NOVEMBER 30, 1994 5
CONSOLIDATED STATEMENTS OF CASH FLOWS - SIX MONTHS
ENDED NOVEMBER 30, 1995 AND NOVEMBER 30, 1994 6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -
NOVEMBER 30, 1995 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 8-9
PART II. OTHER INFORMATION
- --------------------------
ITEM 4.. SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS 10
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 10
SIGNATURES 11
- ----------
<PAGE>
PART I. FINANCIAL INFORMATION
PAYCHEX, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
NOVEMBER 30, MAY 31,
1995 1995
----------- -------
ASSETS (UNAUDITED)
(in thousands)
<S> <C> <C>
CURRENT ASSETS
CASH AND CASH EQUIVALENTS $ 8,907 $ 12,942
INVESTMENTS 85,736 70,753
INTEREST RECEIVABLE 7,201 6,699
TRADE ACCOUNTS RECEIVABLE 37,629 30,772
PREPAID EXPENSES AND OTHER
CURRENT ASSETS 2,599 1,743
DEFERRED INCOME TAXES -0- 1,310
-------- ---------
TOTAL CURRENT ASSETS 142,072 124,219
PROPERTY AND EQUIPMENT
LAND AND IMPROVEMENTS 2,787 2,779
BUILDINGS 24,423 21,304
DATA PROCESSING EQUIPMENT 40,955 33,980
FURNITURE, FIXTURES AND EQUIPMENT 35,445 29,135
LEASEHOLD IMPROVEMENTS 2,306 1,528
-------- ---------
105,916 88,726
LESS ALLOWANCE FOR DEPRECIATION
AND AMORTIZATION 54,990 45,019
-------- ---------
NET PROPERTY AND EQUIPMENT 50,926 43,707
OTHER ASSETS 5,376 511
-------- ---------
TOTAL ASSETS $198,374 $ 168,437
======== ==========
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<PAGE>
PAYCHEX, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS, CONT'D.
<TABLE>
<CAPTION>
NOVEMBER 30, MAY 31,
1995 1995
----------- ---------
(UNAUDITED)
LIABILITIES AND STOCKHOLDERS' EQUITY (in thousands)
<S> <C> <C>
CURRENT LIABILITIES
TRADE ACCOUNTS PAYABLE $ 5,608 $ 3,519
ACCRUED COMPENSATION AND
RELATED ITEMS 13,311 13,162
ACCRUED INCOME TAXES 959 682
OTHER ACCRUED EXPENSES 6,558 6,116
DEFERRED REVENUE 3,126 2,977
CURRENT PORTION OF LONG-TERM DEBT -0- 205
---------- ----------
TOTAL CURRENT LIABILITIES 29,562 26,661
OTHER LIABILITIES
LONG-TERM DEBT -0- 523
UNAMORTIZED LEASE INCENTIVES 433 557
DEFERRED INCOME TAXES 391 764
---------- ----------
TOTAL LIABILITIES 30,386 28,505
STOCKHOLDERS' EQUITY
COMMON STOCK, $.01 PAR VALUE,
AUTHORIZED 150,000,000 SHARES:
ISSUED 45,583,512 AT NOVEMBER
30, 1995 AND 45,031,716 AT
MAY 31, 1995 456 450
ADDITIONAL CAPITAL 25,610 17,727
RETAINED EARNINGS 141,922 121,755
--------- ----------
167,988 139,932
--------- ----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 198,374 $ 168,437
========== ==========
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<PAGE>
PAYCHEX, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
NOVEMBER 30, NOVEMBER 30,
--------------------- --------------------
1995 1994 1995 1994
---- ---- ---- ----
(in thousands, except per share amounts)
<S> <C> <C> <C> <C>
REVENUE $78,232 $63,766 $154,405 $126,689
OPERATING COSTS 23,793 18,399 46,177 36,049
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 37,962 32,443 75,992 64,814
------- ------- -------- --------
OPERATING INCOME 16,477 12,924 32,236 25,826
OTHER INCOME (EXPENSE)
INVESTMENT INCOME 1,391 788 2,747 1,494
INTEREST EXPENSE (17) (22) (41) (63)
------- ------- -------- --------
INCOME BEFORE INCOME
TAXES 17,851 13,690 34,942 27,257
INCOME TAXES 5,070 4,052 9,958 8,068
------- ------- -------- --------
NET INCOME $12,781 $ 9,638 $ 24,984 $ 19,189
======= ======= ======== ========
NET INCOME PER SHARE $ .28 $ .22 $ .55 $ .43
======= ======= ======== ========
CASH DIVIDENDS PER
SHARE $ .09 $ .06 $ .15 $ .10
======= ======= ======== ========
WEIGHTED AVERAGE SHARES
OUTSTANDING 45,513 44,883 45,454 44,875
======= ======= ======== ========
NOTE: PER SHARE AMOUNTS AND AVERAGE SHARES OUTSTANDING HAVE BEEN ADJUSTED FOR A
THREE-FOR-TWO STOCK SPLIT EFFECTIVE MAY, 1995.
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<PAGE>
PAYCHEX, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED NOVEMBER 30,
-----------------------------
1995 1994
---- ----
(in thousands)
<S> <C> <C>
OPERATING ACTIVITIES
NET INCOME $ 24,984 $ 19,189
ADJUSTMENTS TO RECONCILE NET INCOME
TO CASH PROVIDED BY OPERATING ACTIVITIES:
DEPRECIATION AND AMORTIZATION 7,149 5,321
PROVISION FOR DEFERRED INCOME TAXES 1,354 1,251
PROVISION FOR BAD DEBTS 340 553
NET REALIZED GAIN ON SALES OF
AVAILABLE-FOR-SALE SECURITIES (377) (18)
CHANGES IN OPERATING ASSETS AND
LIABILITIES:
TRADE ACCOUNTS RECEIVABLE (6,452) (8,203)
INTEREST RECEIVABLE (502) (507)
PREPAID EXPENSES AND OTHER
CURRENT ASSETS (577) 332
TRADE ACCOUNTS PAYABLE AND OTHER
CURRENT LIABILITIES 1,701 5,166
DEFERRED REVENUE 149 (250)
CHANGE IN UNAMORTIZED LEASE INCENTIVES (154) (228)
--------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES 27,615 22,606
INVESTING ACTIVITIES
INVESTMENT PURCHASES OF AVAILABLE-
FOR-SALE SECURITIES (55,313) (18,647)
PROCEEDS FROM SALES OF AVAILABLE-
FOR-SALE SECURITIES 38,320 3,021
PROCEEDS FROM MATURITIES OF AVAILABLE-
FOR-SALE SECURITIES 3,387 500
ADDITIONS TO PROPERTY AND EQUIPMENT,
NET OF NORMAL DISPOSALS (11,501) (5,733)
NET CHANGE IN OTHER ASSETS (897) (25)
---------- --------
NET CASH USED IN INVESTING ACTIVITIES (26,004) (20,884)
<PAGE>
FINANCING ACTIVITIES
PAYMENTS ON LONG-TERM DEBT (728) -0-
PROCEEDS AND TAX BENEFIT FROM EXERCISE
OF STOCK OPTIONS 1,084 193
DIVIDENDS PAID (6,814) (4,487)
----------- --------
NET CASH USED IN FINANCING ACTIVITIES (6,458) (4,294)
----------- --------
DECREASE IN CASH AND CASH EQUIVALENTS (4,847) (2,572)
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 12,942 14,605
CASH OBTAINED FROM PAY-FONE AND THE PAYROLL
COMPANY MERGERS 812 -0-
---------- --------
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 8,907 $ 12,033
========== ========
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<PAGE>
PAYCHEX, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOVEMBER 30, 1995
A) THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS OF PAYCHEX, INC. AND
ITS WHOLLY-OWNED SUBSIDIARIES HAVE BEEN PREPARED IN ACCORDANCE WITH
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES FOR INTERIM FINANCIAL
INFORMATION AND WITH THE INSTRUCTIONS TO FORM 10-Q AND ARTICLE 10 OF
REGULATION S-X. ACCORDINGLY, THE CONSOLIDATED FINANCIAL STATEMENTS DO
NOT INCLUDE ALL OF THE INFORMATION AND FOOTNOTES REQUIRED BY GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES FOR COMPLETE FINANCIAL STATEMENTS. IN
THE OPINION OF MANAGEMENT, ALL ADJUSTMENTS CONSIDERED NECESSARY FOR A
FAIR PRESENTATION HAVE BEEN INCLUDED. THE ACCOMPANYING FINANCIAL
STATEMENTS SHOULD BE READ IN CONJUNCTION WITH THE NOTES TO FINANCIAL
STATEMENTS PRESENTED IN THE COMPANY'S FORM 10-K AND ANNUAL REPORT FOR
THE YEAR ENDED MAY 31, 1995.
B) DURING THE SIX-MONTH PERIOD ENDING NOVEMBER 30, 1995, 113,938
SHARES OF STOCK WERE ISSUED UPON EXERCISE OF STOCK OPTIONS.
C) ON JUNE 15, 1995, PAYCHEX ACQUIRED PAY-FONE SYSTEMS, INC. FOR
APPROXIMATELY 332,000 SHARES OF PAYCHEX STOCK IN A BUSINESS COMBINATION
ACCOUNTED FOR AS A POOLING OF INTERESTS. RESULTS OF OPERATIONS PRIOR
TO THE MERGER HAVE NOT BEEN RESTATED AS THE EFFECTS WOULD BE IMMATERIAL.
D) ON SEPTEMBER 29, 1995, PAYCHEX ACQUIRED THE PAYROLL COMPANY, INC. FOR
APPROXIMATELY 116,000 SHARES OF COMMON STOCK IN A BUSINESS COMBINATION
ACCOUNTED FOR AS A PURCHASE. THE PURCHASE DID NOT HAVE A SIGNIFICANT
IMPACT ON THE COMPANY'S SECOND QUARTER FINANCIAL POSITION AND RESULTS
OF OPERATIONS.
E) CERTAIN AMOUNTS FROM THE PRIOR YEAR ARE RECLASSIFIED TO CONFORM TO
FISCAL 1996 PRESENTATIONS.
<PAGE>
PAYCHEX, INC. AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
THE FOLLOWING IS MANAGEMENT'S DISCUSSION OF CERTAIN SIGNIFICANT CHANGES
IN THE RESULTS OF OPERATIONS DURING THE PERIODS INCLUDED IN THE
ACCOMPANYING FINANCIAL STATEMENTS.
RESULTS OF OPERATIONS
REVENUE FOR THE SECOND QUARTER AND SIX MONTHS ENDED NOVEMBER 30, 1995
ROSE BY 23% TO $78,232,000 AND 22% TO $154,405,000 RESPECTIVELY, WHEN
COMPARED TO THE SAME PERIODS LAST YEAR. THESE FAVORABLE REVENUE
INCREASES WERE THE RESULT OF CONTINUED GROWTH OF CLIENTS UTILIZING THE
BASIC PAYROLL SERVICE, AND THE TAXPAY AND DIRECT DEPOSIT FEATURES.
INCREASED SALES OF THE PRODUCTS OFFERED BY THE HUMAN RESOURCE SERVICES
DIVISION ALSO CONTRIBUTED TO THESE RECORD REVENUE AMOUNTS. CONTINUED
REVENUE GROWTH IS EXPECTED THROUGHOUT THE YEAR.
OPERATING COSTS WERE 30% OF REVENUE FOR THE CURRENT THREE AND SIX MONTH
PERIODS, UP MODESTLY FROM 29% AND 28% FOR THE RESPECTIVE PRIOR YEAR
PERIODS. FULL YEAR OPERATING COSTS, AS A PERCENTAGE OF REVENUE, ARE
EXPECTED TO REMAIN RELATIVELY CONSISTENT WITH FISCAL 1995.
SELLING, GENERAL AND ADMINISTRATING EXPENSES WERE 49% OF REVENUE FOR
THE THREE AND SIX MONTH PERIODS OF THE CURRENT YEAR, DOWN FROM 51% OF
REVENUE FOR BOTH PRIOR YEAR PERIODS. FOR THE FULL YEAR, THE COMPANY
EXPECTS SELLING, GENERAL AND ADMINISTRATIVE EXPENSES, AS A PERCENTAGE
OF REVENUE, TO BE SLIGHTLY LOWER THAN LAST YEAR.
THE EFFECTIVE TAX RATES FOR THE CURRENT QUARTER AND SIX MONTH PERIODS
WERE 28.4% AND 28.5%, RESPECTIVELY, DOWN FROM 29.6% FOR BOTH PERIODS
LAST YEAR. THE LOWER CURRENT YEAR RATES WERE GENERALLY DUE TO THE
INCREASE OF TAX-EXEMPT INTEREST INCOME AS A PERCENTAGE OF PRE-TAX
INCOME. IT IS ANTICIPATED THAT THE EFFECTIVE TAX RATE FOR THE CURRENT
FISCAL YEAR WILL BE CONSISTENT WITH LAST YEAR'S RATE.
ON JUNE 15, 1995, THE STOCKHOLDERS OF PAY-FONE SYSTEMS, INC. RECEIVED
APPROXIMATELY 332,000 SHARES OF PAYCHEX COMMON STOCK IN A BUSINESS
COMBINATION ACCOUNTED FOR AS A POOLING OF INTERESTS. RESULTS OF
OPERATIONS PRIOR TO THE MERGER HAVE NOT BEEN RESTATED AS THE EFFECTS
WOULD BE IMMATERIAL.
ON SEPTEMBER 29, 1995, THE COMPANY ACQUIRED THE PAYROLL COMPANY, INC.
FOR APPROXIMATELY 116,000 SHARES OF COMMON STOCK IN A BUSINESS
COMBINATION ACCOUNTED FOR AS A PURCHASE. THE ACQUISITION DID NOT HAVE
A SIGNIFICANT IMPACT ON PAYCHEX' SECOND QUARTER FINANCIAL POSITION AND
RESULTS OF OPERATIONS.
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
NET CASH PROVIDED BY OPERATING ACTIVITIES TOTALED $27,615,000 FOR THE
SIX MONTHS ENDED NOVEMBER 30, 1995, UP FROM $22,606,000 FOR THE SAME
PERIOD LAST YEAR. THIS GAIN WAS PRIMARILY ATTRIBUTED TO RECORD
YEAR-TO-DATE NET INCOME WHICH REACHED $24,984,000, A 30% INCREASE OVER
NET INCOME OF $19,189,000 FOR THE SAME PERIOD LAST YEAR.
INVESTMENT PURCHASES AND SALES INCREASED IN THE FIRST SIX MONTHS OF THE
CURRENT YEAR WHEN COMPARED TO THE SAME PERIOD LAST YEAR DUE TO
INCREASED INVESTMENT ACTIVITY.
THE COMPANY INCREASED ITS QUARTERLY CASH DIVIDEND PAYMENT FROM $.06 PER
SHARE TO $.09 PER SHARE DURING THE CURRENT QUARTER.
CAPITAL EXPENDITURES FOR THE SIX-MONTH PERIOD WERE $11,546,000 AND ARE
EXPECTED TO RANGE BETWEEN $8,000,000 AND $9,000,000 FOR THE REMAINDER
OF THE YEAR.
PROJECTED CASH FLOWS ARE EXPECTED TO BE ADEQUATE TO SUPPORT NORMAL
BUSINESS OPERATIONS, PLANNED CAPITAL EXPENDITURES AND DIVIDEND
PAYMENTS. FURTHERMORE, THE COMPANY HAS $210,000,000 OF UNSECURED BANK
LINES OF CREDIT AVAILABLE FOR ITS USE. AS OF NOVEMBER 30, 1995, THERE
WERE NO OUTSTANDING BORROWINGS UNDER THESE LINES OF CREDIT.
<PAGE>
PART II. OTHER INFORMATION
PAYCHEX, INC. AND SUBSIDIARIES
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
A. AT THE COMPANY'S ANNUAL MEETING OF STOCKHOLDERS HELD ON OCTOBER
5, 1995, THE FOLLOWING PERSONS WERE ELECTED TO THE BOARD OF
DIRECTORS:
B. THOMAS GOLISANO
G. THOMAS CLARK
DONALD W. BRINCKMAN
STEVEN D. BROOKS
PHILLIP HORSLEY
GRANT M. INMAN
HARRY P. MESSINA, JR.
J. ROBERT SEBO
B. THE FOLLOWING PROPOSALS WERE APPROVED AT THE COMPANY'S ANNUAL
MEETING:
AFFIRMATIVE NEGATIVE ABSTAINED
VOTES VOTES VOTES
----------- -------- ---------
1. TO AMEND THE COMPANY'S
CERTIFICATE OF INCORPORATION
INCREASING THE AUTHORIZED
SHARES FROM 50,000,000 TO
150,000,000 33,273,628 5,684,100 141,531
2. TO ADOPT THE PAYCHEX, INC.
1995 STOCK INCENTIVE PLAN,
AUTHORIZING THE GRANTING OF
OPTIONS TO PURCHASE UP TO
1,250,000 SHARES OF THE
COMPANY'S COMMON STOCK 38,072,828 843,815 182,615
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
A. EXHIBITS
--------
(3)(i) CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION
FILED WITH THE DELAWARE SECRETARY OF STATE ON OCTOBER 5, 1995.
B. REPORTS ON FORM 8-K
-------------------
THERE WERE NO REPORTS ON FORM 8-K FILED DURING THE THREE MONTH
PERIOD ENDED NOVEMBER 30, 1995.
<PAGE>
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 THEREUNTO DULY AUTHORIZED.
PAYCHEX, INC. AND SUBSIDIARIES
DATE: JANUARY 10, 1996 /s/ B. THOMAS GOLISANO
----------------------
B. THOMAS GOLISANO
CHAIRMAN, PRESIDENT AND CHIEF
EXECUTIVE OFFICER
DATE: JANUARY 10, 1996 /s/ G. THOMAS CLARK
-------------------
G. THOMAS CLARK
SECRETARY, TREASURER AND
SENIOR VICE PRESIDENT OF FINANCE
<PAGE>
EXHIBIT (3)(i)
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
PAYCHEX, INC.
Under Section 242 of the General Corporation Law
The undersigned, being the President and Secretary of Paychex, Inc. do
hereby certify as follows:
1. The name of the Corporation is Paychex, Inc. The Corporation was
originally formed under the name Blase T. Golisano, Inc., the name having
been changed by Amendment contained in a Certificate of Merger filed on May
17, 1979.
2. The Certificate of Incorporation was filed by the Delaware Secretary
of State on April 26, 1979.
3. The Certificate of Incorporation is amended to increase the number of
authorized shares from 50,000,000 having a par value of $.01 each, to
150,000,000 having a par value of $.01 each.
Paragraph 4 of the Certificate of Incorporation is amended to read in
its entirety as follows:
"4 The total number of shares of stock which the Corporation shall
have authority to issue is 150,000,000 shares of common stock and
the par value of each of such shares is $.01, amounting in the
aggregate to $1,500,000."
4. The Amendment to the Certificate of Incorporation was adopted by the
Board of Directors and authorized at a meeting of stockholders by vote of the
holders of a majority of all outstanding shares entitled to vote.
IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
signed by its President and attested by its Secretary this 5th day of
October, 1995.
/s/ B. Thomas Golisano
-----------------------------------
B. Thomas Golisano, President
Attested By:
/s/ G. Thomas Clark
-----------------------------------
G. Thomas Clark, Secretary
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE NOVEMBER
30, 1995 FINANCIAL STATEMENTS OF PAYCHEX, INC. AND SUBSIDIARIES AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000723531
<NAME> PAYCHEX,INC.
<MULTIPLIER> 1000
<CURRENCY> US
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAY-31-1996
<PERIOD-START> JUN-01-1995
<PERIOD-END> NOV-30-1995
<EXCHANGE-RATE> 1
<CASH> 8,907
<SECURITIES> 85,736
<RECEIVABLES> 37,629
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 142,072
<PP&E> 105,916
<DEPRECIATION> 54,990
<TOTAL-ASSETS> 198,374
<CURRENT-LIABILITIES> 29,562
<BONDS> 0
<COMMON> 456
0
0
<OTHER-SE> 167,532
<TOTAL-LIABILITY-AND-EQUITY> 198,374
<SALES> 154,405
<TOTAL-REVENUES> 154,405
<CGS> 0
<TOTAL-COSTS> 122,169
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 41
<INCOME-PRETAX> 34,942
<INCOME-TAX> 9,958
<INCOME-CONTINUING> 24,984
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 24,984
<EPS-PRIMARY> .55
<EPS-DILUTED> .55
</TABLE>
