[October 29, 2018] |
|
Ceridian Reports Third Quarter 2018 Results
Ceridian HCM Holding Inc. ("Ceridian" or the "Company") (NYSE:CDAY)
(TSX:CDAY), a global human capital management (HCM) software company,
announced today its financial results for the third quarter ended
September 30, 2018. All financial results are reported in U.S. dollars
unless otherwise stated. A reconciliation of U.S. generally accepted
accounting principles ("GAAP") to non-GAAP financial measures has been
provided in this press release, including the accompanying tables. An
explanation of these measures is also included below under the
heading "Use of Non-GAAP Financial Measures."
"We are pleased to continue the momentum in our business with strong
third quarter results," said David Ossip, Chairman and Chief Executive
Officer of Ceridian. "Revenue from Dayforce, our flagship cloud HCM
platform, grew 36% to $111.7 million, and we now have 3,465 customers
live on the Dayforce platform. During the third quarter, we continued to
see strong market demand for our products."
Arthur Gitajn, Executive Vice President and Chief Financial Officer of
Ceridian, added, "We achieved solid revenue growth in the quarter
despite facing a weaker Canadian dollar compared to our third quarter
last year. On a constant currency basis, Ceridian's total revenue grew
11.4%, Cloud revenue grew 31.2%, Dayforce revenue grew 36.8%, and
Powerpay revenue grew 8.0%."
Financial Highlights for the Third Quarter of 2018
Revenue
-
Dayforce revenue increased 35.7% to $111.7 million from $82.3 million
in the third quarter of 2017.
-
Cloud revenue, which includes both Dayforce and Powerpay, increased
29.1% to $133.0 million from $103.0 million in the third quarter of
2017.
-
Total revenue, which includes revenue from both our Cloud and Bureau
solutions, increased 9.8% to $179.6 million from $163.5 million in the
third quarter of 2017.
-
Excluding the effect of foreign currency fluctuations, Dayforce
revenue increased 36.8% year-over-year, Cloud revenue increased 31.2%
year-over-year, and total revenue increased 11.4% year-over-year.
Operating Profit, Pretax Income (Loss), and
Adjusted EBITDA
-
Operating profit increased 200.0% to $15.3 million from $5.1 million
in the third quarter of 2017. Pretax income from continuing operations
was $6.5 million compared to a pretax loss from continuing operations
of $(16.8) million in the third quarter of 2017.
-
Adjusted EBITDA increased 28.2% to $36.4 million from $28.4 million in
the third quarter of 2017. Adjusted EBITDA margin increased to 20.3%
from 17.4%, in the third quarter of 2017.
Net Income (Loss) and Net Income (Loss) Per Share
-
Income from continuing operations was $7.4 million, compared to a loss
from continuing operations of $(17.7) million for the third quarter of
2017. Basic and diluted net income per share from continuing
operations attributable to Ceridian was $0.05 for the third quarter of
2018 based on 137.8 million basic and 145.1 million diluted weighted
average common shares outstanding, respectively. Basic and diluted net
loss per share from continuing operations attributable to Ceridian was
$(0.35) for the third quarter of 2017, based on 65.3 million basic and
diluted weighted average common shares outstanding.
Balance Sheet
-
Cash and cash equivalents were $188.0 million as of September 30,
2018, an increase of $93.8 million compared to $94.2 million as of
December 31, 2017.
-
Total debt was $671.8 million as of September 30, 2018, a reduction of
$448.0 million compared to $1,119.8 million as of December 31, 2017.
Dayforce Live Customer Count
-
3,465 Dayforce customers were live on the Dayforce platform at the end
of the third quarter of 2018, an increase of 610 customers as compared
to 2,855 Dayforce customers at the end of the third quarter of 2017.
Business Outlook
Due to our strong results in the third quarter, we are increasing our
full year fiscal 2018 guidance as follows:
-
Cloud revenue is expected to be in the range of $532 million to
$534 million. This implies fourth quarter Cloud revenue of between
$146 million and $148 million.
-
Total revenue is expected to be in the range of $741 million to
$743 million. This implies fourth quarter total revenue of between
$195 million and $197 million.
-
Adjusted EBITDA is expected to be in the range of $150 million to $153
million. This implies fourth quarter Adjusted EBITDA of between $36.5
million and $39.5 million.
We have not reconciled the Adjusted EBITDA ranges for the fourth quarter
of 2018 or the full fiscal year of 2018 to the directly comparable GAAP
financial measure because applicable information for future periods, on
which this reconciliation would be based, is not readily available due
to uncertainty regarding, and the potential variability of, depreciation
and amortization, share-based compensation expense, changes in foreign
currency exchange rates and other items. Accordingly, a reconciliation
of these Adjusted EBITDA ranges to the directly comparable GAAP
financial measure is not available at this time.
Conference Call Details
Ceridian will host a conference call on October 29, 2018 at 8:00 a.m.
Eastern Time to discuss the financial results for the third quarter of
2018. Those wishing to participate via the webcast should access the
call through Ceridian's Investor Relations website at https://investors.ceridian.com.
Those wishing to participate via the telephone may dial in at
877-701-0459 (USA) or 647-689-5466 (International). The conference call
replay will be available via webcast through Ceridian's Investor
Relations website at https://investors.ceridian.com.
About Ceridian HCM Holding Inc.
Ceridian. Makes Work Life Better™.
Ceridian is a global human capital management software company.
Dayforce, our flagship cloud HCM platform, provides human resources,
payroll, benefits, workforce management, and talent management
functionality. Our platform is used to optimize management of the entire
employee lifecycle, including attracting, engaging, paying, deploying,
and developing people. Ceridian has solutions for organizations of all
sizes.
Use of Non-GAAP Financial Measures
We use certain non-GAAP financial measures in this release including
Adjusted EBITDA, Adjusted EBITDA margin, and revenue growth in a
constant currency. We believe that Adjusted EBITDA and Adjusted EBITDA
margin, non-GAAP financial measures, are useful to management and
investors as supplemental measures to evaluate our overall operating
performance. Adjusted EBITDA and Adjusted EBITDA margin are components
of our management incentive plan and are used by management to assess
performance and to compare our operating performance to our competitors.
We define Adjusted EBITDA as net income or loss before interest, taxes,
depreciation, and amortization, as adjusted to exclude net income or
loss from discontinued operations, sponsor management
fees, non-cash charges for asset impairments, gains or losses on assets
and liabilities held in a foreign currency other than the functional
currency of a company subsidiary, share-based compensation expense,
severance charges, restructuring consulting fees, transaction costs, and
environmental reserve charges. Adjusted EBITDA margin is determined by
calculating the percentage Adjusted EBITDA is of Total Revenue.
Management believes that Adjusted EBITDA and Adjusted EBITDA margin are
helpful in highlighting management performance trends because Adjusted
EBITDA and Adjusted EBITDA margin exclude the results of decisions that
are outside the normal course of our business operations.
Our presentation of Adjusted EBITDA and Adjusted EBITDA margin are
intended as supplemental measures of our performance that are not
required by, or presented in accordance with, U.S. GAAP. Adjusted EBITDA
and Adjusted EBITDA margin should not be considered as alternatives to
operating profit (loss), net income (loss), earnings per share, or any
other performance measures derived in accordance with U.S. GAAP, or as
measures of operating cash flows or liquidity. Our presentation of
Adjusted EBITDA and Adjusted EBITDA margin should not be construed to
imply that our future results will be unaffected by these items.
Adjusted EBITDA and Adjusted EBITDA margin are included in this
discussion because they are key metrics used by management to assess our
operating performance.
Adjusted EBITDA and Adjusted EBITDA margin are not defined under U.S.
GAAP, are not measures of net income, operating income, or any other
performance measures derived in accordance with U.S. GAAP, and are
subject to important limitations. Our use of the terms Adjusted EBITDA
and Adjusted EBITDA margin may not be comparable to similarly titled
measures of other companies in our industry and are not measures of
performance calculated in accordance with U.S. GAAP.
Adjusted EBITDA and Adjusted EBITDA margin have important limitations as
analytical tools, and you should not consider them in isolation or as
substitutes for analysis of our results as reported under U.S. GAAP.
Some of these limitations are:
-
Adjusted EBITDA and Adjusted EBITDA margin do not reflect our cash
expenditures or future requirements for capital expenditures or
contractual commitments;
-
Adjusted EBITDA and Adjusted EBITDA margin do not reflect changes in,
or cash requirements for, our working capital needs;
-
Adjusted EBITDA and Adjusted EBITDA margin do not reflect any charges
for the assets being depreciated and amortized that may need to be
replaced in the future;
-
Adjusted EBITDA and Adjusted EBITDA margin do not reflect the impact
of share-based compensation upon our results of operations;
-
Adjusted EBITDA and Adjusted EBITDA margin do not reflect the
significant interest expense or the cash requirements necessary to
service interest or principal payments on our debt; and
-
Adjusted EBITDA and Adjusted EBITDA margin do not reflect our income
tax expense or the cash requirements to pay our income taxes.
In evaluating Adjusted EBITDA and Adjusted EBITDA margin, you should be
aware that in the future we may incur expenses similar to those
eliminated in this presentation.
We present revenue growth in a constant currency to assess how our
underlying businesses performed, excluding the effect of foreign
currency rate fluctuations. We calculate percentage change in revenue on
a constant currency basis by applying a fixed planning rate of $1.30
Canadian dollar to $1.00 U.S. dollar foreign exchange rate to revenues
originally booked in Canadian dollars for all applicable periods.
Forward-Looking Statements
This press release contains forward-looking statements that are subject
to risks and uncertainties. All statements other than statements of
historical fact or relating to present facts or current conditions
included in this press release are forward-looking statements.
Forward-looking statements give our current expectations and projections
relating to our financial condition, results of operations, plans,
objectives, future performance and business. You can identify
forward-looking statements by the fact that they do not relate strictly
to historical or current facts. Forward-looking statements in this press
release include statements relating to fourth quarter and full year
fiscal 2018 total revenue, Cloud revenue and Adjusted EBITDA, as well as
those relating to future growth initiatives. These statements may
include words such as "anticipate," "estimate," "expect," "project,"
"seek," "plan," "intend," "believe," "will," "may," "could," "continue,"
"likely," "should," and other words and terms of similar meaning in
connection with any discussion of the timing or nature of future
operating or financial performance or other events but not all
forward-looking statements contain these identifying words. The
forward-looking statements contained in this press release are based on
assumptions that we have made in light of our industry experience and
our perceptions of historical trends, current conditions, expected
future developments and other factors that we believe are appropriate
under the circumstances. As you consider this press release, you should
understand that these statements are not guarantees of performance or
results. These assumptions and our future performance or results involve
risks and uncertainties (many of which are beyond our control). These
risks and uncertainties include, but are not limited to, the following:
our inability to attain or to maintain profitability; significant
competition for our solutions; our inability to continue to develop or
to sell our existing Cloud solutions; our inability to manage our growth
effectively; the risk that we may not be able to successfully migrate
our Bureau customers to our Cloud solutions or to offset the decline in
Bureau revenue with Cloud revenue; the market for enterprise cloud
computing develops slower than we expect or declines; efforts to
increase use of our Cloud solutions and our other applications may not
succeed; we fail to provide enhancements and new features and
modifications to our solutions; we fail to comply with the FTC's ongoing
consent order regarding data protection; system interruptions or
failures, including cyber-security breaches, identity theft, or other
disruptions that could compromise our information; our failure to comply
with applicable privacy, security and data laws, regulations and
standards; changes in regulations governing privacy concerns and laws or
other domestic or foreign data protection regulations; we are unable to
successfully expand our current offerings into new markets or further
penetrate existing markets; we are unable to meet the more complex
configuration and integration demands of our large customers; our
customers declining to renew their agreements with us or renewing at
lower performance fee levels; we fail to manage our technical operations
infrastructure; we are unable to maintain necessary third party licenses
or errors; our inability to protect our intellectual property rights,
proprietary technology, information, processes, and know-how; we fail to
keep pace with rapid technological changes and evolving industry
standards; changes in laws and regulations related to the Internet or
changes in the Internet infrastructure itself and general economic,
political and market forces beyond our control. Additional factors or
events that could cause our actual performance to differ from these
forward-looking statements may emerge from time to time, and it is not
possible for us to predict all of them. Should one or more of these
risks or uncertainties materialize, or should any of our assumptions
prove incorrect, our actual financial condition, results of operations,
future performance and business may vary in material respects from the
performance projected in these forward-looking statements. In addition
to any factors and assumptions set forth above in this press release,
the material factors and assumptions used to develop the forward-looking
information include, but are not limited to: the general economy remains
stable; the competitive environment in the HCM market remains stable;
the demand environment for HCM solutions remains stable; our
implementation capabilities and cycle times remain stable; the U.S.
Federal Reserve and Bank of Canada continue to increase interest rates
as anticipated; foreign exchange rates, specifically USD to CAD, remain
stable at, or near, current rates; we will be able to maintain our
relationships with our employees, customers and partners; we will
continue to attract qualified personnel to support our development
requirements and the support of our new and existing customers; and that
the risk factors noted above, individually or collectively, do not have
a material impact on the Company. Any forward-looking statement made by
us in this press release speaks only as of the date on which it is made.
We undertake no obligation to publicly update any forward-looking
statement, whether as a result of new information, future developments
or otherwise, except as may be required by law.
|
Ceridian HCM Holding Inc.
|
Condensed Consolidated Balance Sheets
|
(Dollars in millions, except share data)
|
|
|
|
|
|
|
|
|
|
September 30, 2018
|
|
|
December 31, 2017
|
|
|
|
(unaudited)
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
Cash and equivalents
|
|
$
|
188.0
|
|
|
$
|
94.2
|
|
Trade and other receivables, net
|
|
|
62.6
|
|
|
|
66.6
|
|
Prepaid expenses
|
|
|
38.7
|
|
|
|
36.4
|
|
Assets of discontinued operations
|
|
|
-
|
|
|
|
156.2
|
|
Other current assets
|
|
|
2.4
|
|
|
|
5.3
|
|
Total current assets before customer trust funds
|
|
|
291.7
|
|
|
|
358.7
|
|
Customer trust funds
|
|
|
3,426.6
|
|
|
|
4,099.7
|
|
Total current assets
|
|
|
3,718.3
|
|
|
|
4,458.4
|
|
Property, plant, and equipment, net
|
|
|
100.6
|
|
|
|
102.0
|
|
Goodwill
|
|
|
1,949.8
|
|
|
|
1,961.0
|
|
Other intangible assets, net
|
|
|
192.3
|
|
|
|
206.5
|
|
Other assets
|
|
|
1.8
|
|
|
|
2.0
|
|
Total assets
|
|
$
|
5,962.8
|
|
|
$
|
6,729.9
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Current portion of long-term debt
|
|
$
|
6.8
|
|
|
$
|
-
|
|
Accounts payable
|
|
|
34.8
|
|
|
|
44.4
|
|
Accrued interest
|
|
|
0.3
|
|
|
|
15.9
|
|
Deferred revenue
|
|
|
16.8
|
|
|
|
14.0
|
|
Employee compensation and benefits
|
|
|
61.2
|
|
|
|
68.8
|
|
Liabilities of discontinued operations
|
|
|
0.2
|
|
|
|
19.6
|
|
Other accrued expenses
|
|
|
19.2
|
|
|
|
15.0
|
|
Total current liabilities before customer trust funds obligations
|
|
|
139.3
|
|
|
|
177.7
|
|
Customer trust funds obligations
|
|
|
3,457.0
|
|
|
|
4,105.5
|
|
Total current liabilities
|
|
|
3,596.3
|
|
|
|
4,283.2
|
|
Long-term debt, less current portion
|
|
|
665.0
|
|
|
|
1,119.8
|
|
Employee benefit plans
|
|
|
124.6
|
|
|
|
152.4
|
|
Other liabilities
|
|
|
38.4
|
|
|
|
45.5
|
|
Total liabilities
|
|
|
4,424.3
|
|
|
|
5,600.9
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
|
|
|
|
Senior preferred stock, $0.01 par, 70,000,000 shares authorized,
16,802,144 shares issued and outstanding as of December 31, 2017
|
|
|
-
|
|
|
|
184.8
|
|
Junior preferred stock, $0.01 par, 70,000,000 shares authorized,
58,244,308 shares issued and outstanding as of December 31, 2017
|
|
|
-
|
|
|
|
0.6
|
|
Common stock, $0.01 par, 500,000,000 shares authorized,
138,049,718 shares issued and outstanding as of September 30, 2018
and 150,000,000 shares authorized, 65,285,962 shares issued and
outstanding as of December 31, 2017
|
|
|
1.4
|
|
|
|
0.7
|
|
Additional paid in capital
|
|
|
2,297.3
|
|
|
|
1,565.4
|
|
Accumulated deficit
|
|
|
(419.1
|
)
|
|
|
(348.2
|
)
|
Accumulated other comprehensive loss
|
|
|
(341.1
|
)
|
|
|
(312.1
|
)
|
Total stockholders' equity
|
|
|
1,538.5
|
|
|
|
1,091.2
|
|
Noncontrolling interest
|
|
|
-
|
|
|
|
37.8
|
|
Total equity
|
|
|
1,538.5
|
|
|
|
1,129.0
|
|
Total liabilities and equity
|
|
$
|
5,962.8
|
|
|
$
|
6,729.9
|
|
|
|
|
|
|
|
|
|
|
Ceridian HCM Holding Inc.
|
Condensed Consolidated Statements of Operations
|
(Unaudited; dollars in millions, except share and per share data)
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
|
Nine Months Ended September 30,
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recurring services
|
|
$
|
157.2
|
|
|
$
|
145.6
|
|
|
$
|
480.8
|
|
|
$
|
438.2
|
|
Professional services and other
|
|
|
22.4
|
|
|
|
17.9
|
|
|
|
65.3
|
|
|
|
50.2
|
|
Total revenue
|
|
|
179.6
|
|
|
|
163.5
|
|
|
|
546.1
|
|
|
|
488.4
|
|
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recurring services
|
|
|
49.1
|
|
|
|
48.4
|
|
|
|
149.3
|
|
|
|
145.8
|
|
Professional services and other
|
|
|
32.5
|
|
|
|
34.8
|
|
|
|
98.7
|
|
|
|
102.8
|
|
Product development and management
|
|
|
14.5
|
|
|
|
11.0
|
|
|
|
43.3
|
|
|
|
31.8
|
|
Depreciation and amortization
|
|
|
8.5
|
|
|
|
8.0
|
|
|
|
25.7
|
|
|
|
23.2
|
|
Total cost of revenue
|
|
|
104.6
|
|
|
|
102.2
|
|
|
|
317.0
|
|
|
|
303.6
|
|
Gross profit
|
|
|
75.0
|
|
|
|
61.3
|
|
|
|
229.1
|
|
|
|
184.8
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general, and administrative
|
|
|
59.4
|
|
|
|
52.4
|
|
|
|
200.3
|
|
|
|
161.0
|
|
Other expense (income), net
|
|
|
0.3
|
|
|
|
3.8
|
|
|
|
(2.5
|
)
|
|
|
6.9
|
|
Operating profit
|
|
|
15.3
|
|
|
|
5.1
|
|
|
|
31.3
|
|
|
|
16.9
|
|
Interest expense, net
|
|
|
8.8
|
|
|
|
21.9
|
|
|
|
74.4
|
|
|
|
65.3
|
|
Income (loss) from continuing operations before income taxes
|
|
|
6.5
|
|
|
|
(16.8
|
)
|
|
|
(43.1
|
)
|
|
|
(48.4
|
)
|
Income tax (benefit) expense
|
|
|
(0.9
|
)
|
|
|
0.9
|
|
|
|
5.8
|
|
|
|
3.8
|
|
Income (loss) from continuing operations
|
|
|
7.4
|
|
|
|
(17.7
|
)
|
|
|
(48.9
|
)
|
|
|
(52.2
|
)
|
Loss from discontinued operations
|
|
|
(3.0
|
)
|
|
|
(2.9
|
)
|
|
|
(14.8
|
)
|
|
|
(2.4
|
)
|
Net income (loss)
|
|
|
4.4
|
|
|
|
(20.6
|
)
|
|
|
(63.7
|
)
|
|
|
(54.6
|
)
|
Net loss attributable to noncontrolling interest
|
|
|
-
|
|
|
|
(0.5
|
)
|
|
|
(0.5
|
)
|
|
|
(0.4
|
)
|
Net income (loss) attributable to Ceridian
|
|
$
|
4.4
|
|
|
$
|
(20.1
|
)
|
|
$
|
(63.2
|
)
|
|
$
|
(54.2
|
)
|
Net income (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.03
|
|
|
$
|
(0.39
|
)
|
|
$
|
(0.67
|
)
|
|
$
|
(1.07
|
)
|
Diluted
|
|
$
|
0.03
|
|
|
$
|
(0.39
|
)
|
|
$
|
(0.67
|
)
|
|
$
|
(1.07
|
)
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
137,768,764
|
|
|
|
65,281,692
|
|
|
|
105,730,178
|
|
|
|
65,181,373
|
|
Diluted
|
|
|
145,064,698
|
|
|
|
65,281,692
|
|
|
|
105,730,178
|
|
|
|
65,181,373
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ceridian HCM Holding Inc.
|
Condensed Consolidated Statements of Comprehensive Income (Loss)
|
(Unaudited, dollars in millions)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
|
Nine Months Ended
September 30,
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
Net income (loss)
|
|
$
|
4.4
|
|
|
$
|
(20.6
|
)
|
|
$
|
(63.7
|
)
|
|
$
|
(54.6
|
)
|
Items of other comprehensive income (loss) before income taxes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in foreign currency translation adjustment
|
|
|
9.8
|
|
|
|
23.1
|
|
|
|
(16.2
|
)
|
|
|
43.9
|
|
Change in unrealized loss from invested customer trust funds
|
|
|
(6.0
|
)
|
|
|
(7.8
|
)
|
|
|
(24.5
|
)
|
|
|
(10.0
|
)
|
Change in pension liability adjustment
|
|
|
2.9
|
|
|
|
2.5
|
|
|
|
8.7
|
|
|
|
7.6
|
|
Other comprehensive income (loss) before income taxes
|
|
|
6.7
|
|
|
|
17.8
|
|
|
|
(32.0
|
)
|
|
|
41.5
|
|
Income tax expense benefit, net
|
|
|
(0.9
|
)
|
|
|
(1.8
|
)
|
|
|
(2.3
|
)
|
|
|
(3.0
|
)
|
Other comprehensive income (loss) after income taxes
|
|
|
7.6
|
|
|
|
19.6
|
|
|
|
(29.7
|
)
|
|
|
44.5
|
|
Comprehensive income (loss)
|
|
|
12.0
|
|
|
|
(1.0
|
)
|
|
|
(93.4
|
)
|
|
|
(10.1
|
)
|
Comprehensive (loss) income attributable to noncontrolling interest
|
|
|
-
|
|
|
|
(0.2
|
)
|
|
|
(0.5
|
)
|
|
|
0.2
|
|
Comprehensive income (loss) attributable to Ceridian
|
|
$
|
12.0
|
|
|
$
|
(0.8
|
)
|
|
$
|
(92.9
|
)
|
|
$
|
(10.3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ceridian HCM Holding Inc.
|
Condensed Consolidated Statements of Cash Flows
|
(Unaudited, dollars in millions)
|
|
|
|
|
|
|
Nine Months Ended September 30,
|
|
|
|
2018
|
|
|
2017
|
|
Net loss
|
|
$
|
(63.7
|
)
|
|
$
|
(54.6
|
)
|
Loss from discontinued operations
|
|
|
14.8
|
|
|
|
2.4
|
|
Adjustments to reconcile net loss to net cash used in operating
activities:
|
|
|
|
|
|
|
|
|
Deferred income tax benefit
|
|
|
(9.8
|
)
|
|
|
(4.4
|
)
|
Depreciation and amortization
|
|
|
42.4
|
|
|
|
39.7
|
|
Amortization of debt issuance costs and debt discount
|
|
|
1.9
|
|
|
|
2.7
|
|
Loss on debt extinguishment
|
|
|
25.7
|
|
|
|
-
|
|
Net periodic pension and postretirement cost
|
|
|
1.8
|
|
|
|
0.9
|
|
Share-based compensation
|
|
|
18.0
|
|
|
|
12.8
|
|
Other
|
|
|
0.1
|
|
|
|
(2.0
|
)
|
Changes in operating assets and liabilities excluding effects of
acquisitions and divestitures:
|
|
|
|
|
|
|
|
|
Trade and other receivables
|
|
|
2.9
|
|
|
|
12.9
|
|
Prepaid expenses and other current assets
|
|
|
(3.0
|
)
|
|
|
(2.8
|
)
|
Accounts payable and other accrued expenses
|
|
|
(8.4
|
)
|
|
|
(9.3
|
)
|
Deferred revenue
|
|
|
2.8
|
|
|
|
3.6
|
|
Employee compensation and benefits
|
|
|
(27.7
|
)
|
|
|
(33.4
|
)
|
Accrued interest
|
|
|
(15.5
|
)
|
|
|
(17.5
|
)
|
Accrued taxes
|
|
|
5.2
|
|
|
|
(10.3
|
)
|
Other assets and liabilities
|
|
|
(2.3
|
)
|
|
|
0.2
|
|
Net cash used in operating activities - continuing operations
|
|
|
(14.8
|
)
|
|
|
(59.1
|
)
|
Net cash used in operating activities - discontinued operations
|
|
|
(3.3
|
)
|
|
|
(5.6
|
)
|
Net cash used in operating activities
|
|
|
(18.1
|
)
|
|
|
(64.7
|
)
|
Cash Flows from Investing Activities
|
|
|
|
|
|
|
|
|
Purchase of customer trust funds marketable securities
|
|
|
(694.8
|
)
|
|
|
(369.5
|
)
|
Proceeds from sale and maturity of customer trust funds marketable
securities
|
|
|
707.9
|
|
|
|
395.9
|
|
Net change in restricted cash and other restricted assets held to
satisfy customer trust funds obligations
|
|
|
610.1
|
|
|
|
252.4
|
|
Expenditures for property, plant, and equipment
|
|
|
(6.8
|
)
|
|
|
(9.6
|
)
|
Expenditures for software and technology
|
|
|
(21.9
|
)
|
|
|
(22.5
|
)
|
Net proceeds from divestitures
|
|
|
-
|
|
|
|
0.9
|
|
Net cash provided by investing activities - continuing operations
|
|
|
594.5
|
|
|
|
247.6
|
|
Net cash used in investing activities - discontinued operations
|
|
|
-
|
|
|
|
(0.2
|
)
|
Net cash provided by investing activities
|
|
|
594.5
|
|
|
|
247.4
|
|
Cash Flows from Financing Activities
|
|
|
|
|
|
|
|
|
Decrease in customer trust funds obligations, net
|
|
|
(623.2
|
)
|
|
|
(278.8
|
)
|
Net proceeds from issuance of common stock
|
|
|
595.0
|
|
|
|
78.4
|
|
Proceeds from issuance of common stock upon exercise of stock options
|
|
|
22.2
|
|
|
|
-
|
|
Repurchase of stock
|
|
|
-
|
|
|
|
(1.8
|
)
|
Proceeds from debt issuance
|
|
|
680.0
|
|
|
|
-
|
|
Repayment of long-term debt obligations
|
|
|
(1,132.3
|
)
|
|
|
(25.9
|
)
|
Payment of debt refinancing costs
|
|
|
(23.3
|
)
|
|
|
-
|
|
Net cash used in financing activities
|
|
|
(481.6
|
)
|
|
|
(228.1
|
)
|
Effect of Exchange Rate Changes on Cash
|
|
|
(1.5
|
)
|
|
|
9.0
|
|
Net increase (decrease) in cash and equivalents
|
|
|
93.3
|
|
|
|
(36.4
|
)
|
Elimination of cash from discontinued operations
|
|
|
0.5
|
|
|
|
0.6
|
|
Cash and equivalents at beginning of period
|
|
|
94.2
|
|
|
|
120.8
|
|
Cash and equivalents at end of period
|
|
$
|
188.0
|
|
|
$
|
85.0
|
|
|
|
|
|
|
|
|
|
|
Ceridian HCM Holding Inc.
|
Reconciliation of GAAP to Non-GAAP Financial Measures
|
(Unaudited, dollars in millions)
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
|
Nine Months Ended September 30,
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
|
|
(Dollars in millions)
|
|
Operating profit
|
|
$
|
15.3
|
|
|
$
|
5.1
|
|
|
$
|
31.3
|
|
|
$
|
16.9
|
|
Depreciation and amortization
|
|
|
14.3
|
|
|
|
13.6
|
|
|
|
42.4
|
|
|
|
39.7
|
|
EBITDA from continuing operations (1)
|
|
|
29.6
|
|
|
|
18.7
|
|
|
|
73.7
|
|
|
|
56.6
|
|
Sponsorship management fees (2)
|
|
|
-
|
|
|
|
0.5
|
|
|
|
12.0
|
|
|
|
1.5
|
|
Intercompany foreign exchange loss (gain)
|
|
|
0.3
|
|
|
|
4.1
|
|
|
|
(2.5
|
)
|
|
|
7.0
|
|
Share-based compensation (3)
|
|
|
4.8
|
|
|
|
4.3
|
|
|
|
19.5
|
|
|
|
12.8
|
|
Severance charges (4)
|
|
|
1.1
|
|
|
|
0.8
|
|
|
|
4.1
|
|
|
|
4.3
|
|
Restructuring consulting fees (5)
|
|
|
0.6
|
|
|
|
-
|
|
|
|
3.1
|
|
|
|
-
|
|
IPO transaction costs (6)
|
|
|
-
|
|
|
|
-
|
|
|
|
3.7
|
|
|
|
-
|
|
Adjusted EBITDA
|
|
$
|
36.4
|
|
|
$
|
28.4
|
|
|
$
|
113.6
|
|
|
$
|
82.2
|
|
Adjusted EBITDA margin
|
|
|
20.3
|
%
|
|
|
17.4
|
%
|
|
|
20.8
|
%
|
|
|
16.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
We define EBITDA from continuing operations as net income or loss
before interest, taxes, depreciation and amortization, and net
income or loss from discontinued operations.
|
(2)
|
|
Represents expenses related to our management, monitoring,
consulting, transaction, and advisory fees and related expenses paid
to the affiliates of our Sponsors pursuant to the management
agreement with THL Managers VI, LLC and Cannae Holdings, LLC. In
April 2018, the management agreements terminated upon consummation
of our IPO. Upon termination, the management agreements provided
that we pay a termination fee equal to the net present value of the
management fee for a seven-year period, which was $11.3 million.
|
(3)
|
|
Share-based compensation expense during the nine months ended
September 30, 2018 includes $8.1 million of expense recognized upon
meeting the performance criteria of all stock appreciation rights
and performance-based stock options, which were triggered by our
IPO, resulting in the vesting of all stock appreciation rights and
performance-based stock options, as well as the vesting of certain
stock options which accelerated upon IPO.
|
(4)
|
|
Represents costs for severance compensation paid to employees whose
positions have been eliminated, resulting primarily from the shift
of business from our Bureau solutions to our Cloud solutions.
|
(5)
|
|
Represents consulting fees and expenses incurred during the periods
presented in connection with any acquisition, investment,
disposition, recapitalization, equity offering, issuance or
repayment of debt, issuance of equity interests, or refinancing.
|
(6)
|
|
Represents expenses related to the IPO and refinancing of our debt,
that were not eligible for capitalization.
|
|
|
|
The following tables present a reconciliation of our reported results to
our non-GAAP Adjusted EBITDA basis for all periods presented:
|
|
|
|
|
Three Months Ended September 30, 2018
|
|
|
As Reported
|
|
|
Share-based compensation
|
|
|
Severance charges
|
|
|
Other operating expenses (1)
|
|
|
Adjusted
|
|
|
(Dollars in millions)
|
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recurring services
|
|
$
|
49.1
|
|
|
$
|
0.3
|
|
|
$
|
0.3
|
|
|
$
|
-
|
|
|
$
|
48.5
|
Professional services and other
|
|
|
32.5
|
|
|
|
0.2
|
|
|
|
0.1
|
|
|
|
-
|
|
|
|
32.2
|
Product development and management
|
|
|
14.5
|
|
|
|
0.3
|
|
|
|
-
|
|
|
|
-
|
|
|
|
14.2
|
Depreciation and amortization
|
|
|
8.5
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
8.5
|
Total cost of revenue
|
|
|
104.6
|
|
|
|
0.8
|
|
|
|
0.4
|
|
|
|
-
|
|
|
|
103.4
|
Sales and marketing
|
|
|
29.7
|
|
|
|
0.7
|
|
|
|
-
|
|
|
|
-
|
|
|
|
29.0
|
General and administrative
|
|
|
29.7
|
|
|
|
3.3
|
|
|
|
0.7
|
|
|
|
0.6
|
|
|
|
25.1
|
Other expense, net
|
|
|
0.3
|
|
|
|
-
|
|
|
|
-
|
|
|
|
0.3
|
|
|
|
-
|
Operating profit
|
|
|
15.3
|
|
|
|
4.8
|
|
|
|
1.1
|
|
|
|
0.9
|
|
|
|
22.1
|
Depreciation and amortization
|
|
|
14.3
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
14.3
|
EBITDA from continuing operations
|
|
$
|
29.6
|
|
|
$
|
4.8
|
|
|
$
|
1.1
|
|
|
$
|
0.9
|
|
|
$
|
36.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Other operating expenses includes sponsor management fees,
intercompany foreign exchange loss (gain), and restructuring
consulting fees.
|
|
|
|
|
|
Three Months Ended September 30, 2017
|
|
|
|
As Reported
|
|
|
Share-based compensation
|
|
|
Severance charges
|
|
|
Other operating expenses (1)
|
|
|
Adjusted
|
|
|
|
(Dollars in millions)
|
|
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recurring services
|
|
$
|
48.4
|
|
|
$
|
0.3
|
|
|
$
|
0.2
|
|
|
$
|
-
|
|
|
$
|
47.9
|
|
Professional services and other
|
|
|
34.8
|
|
|
|
0.3
|
|
|
|
0.3
|
|
|
|
-
|
|
|
|
34.2
|
|
Product development and management
|
|
|
11.0
|
|
|
|
0.2
|
|
|
|
0.1
|
|
|
|
-
|
|
|
|
10.7
|
|
Depreciation and amortization
|
|
|
8.0
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
8.0
|
|
Total cost of revenue
|
|
|
102.2
|
|
|
|
0.8
|
|
|
|
0.6
|
|
|
|
-
|
|
|
|
100.8
|
|
Sales and marketing
|
|
|
27.0
|
|
|
|
0.5
|
|
|
|
0.2
|
|
|
|
-
|
|
|
|
26.3
|
|
General and administrative
|
|
|
25.4
|
|
|
|
3.0
|
|
|
|
-
|
|
|
|
0.5
|
|
|
|
21.9
|
|
Other expense (income), net
|
|
|
3.8
|
|
|
|
-
|
|
|
|
-
|
|
|
|
4.1
|
|
|
|
(0.3
|
)
|
Operating profit
|
|
|
5.1
|
|
|
|
4.3
|
|
|
|
0.8
|
|
|
|
4.6
|
|
|
|
14.8
|
|
Depreciation and amortization
|
|
|
13.6
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
13.6
|
|
EBITDA from continuing operations
|
|
$
|
18.7
|
|
|
$
|
4.3
|
|
|
$
|
0.8
|
|
|
$
|
4.6
|
|
|
$
|
28.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Other operating expenses includes sponsor management fees,
intercompany foreign exchange loss (gain), and restructuring
consulting fees.
|
|
|
|
|
|
Nine Months Ended September 30, 2018
|
|
|
As Reported
|
|
|
Share-based compensation
|
|
|
Severance charges
|
|
|
Other operating expenses (1)
|
|
|
Adjusted
|
|
|
(Dollars in millions)
|
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recurring services
|
|
$
|
149.3
|
|
|
$
|
1.7
|
|
|
$
|
1.1
|
|
|
$
|
-
|
|
|
$
|
146.5
|
Professional services and other
|
|
|
98.7
|
|
|
|
1.0
|
|
|
|
0.7
|
|
|
|
-
|
|
|
|
97.0
|
Product development and management
|
|
|
43.3
|
|
|
|
0.9
|
|
|
|
0.1
|
|
|
|
-
|
|
|
|
42.3
|
Depreciation and amortization
|
|
|
25.7
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
25.7
|
Total cost of revenue
|
|
|
317.0
|
|
|
|
3.6
|
|
|
|
1.9
|
|
|
|
-
|
|
|
|
311.5
|
Sales and marketing
|
|
|
92.3
|
|
|
|
3.5
|
|
|
|
1.0
|
|
|
|
-
|
|
|
|
87.8
|
General and administrative
|
|
|
108.0
|
|
|
|
12.4
|
|
|
|
1.2
|
|
|
|
18.8
|
|
|
|
75.6
|
Other income, net
|
|
|
(2.5
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(2.5
|
)
|
|
|
-
|
Operating profit
|
|
|
31.3
|
|
|
|
19.5
|
|
|
|
4.1
|
|
|
|
16.3
|
|
|
|
71.2
|
Depreciation and amortization
|
|
|
42.4
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
42.4
|
EBITDA from continuing operations
|
|
$
|
73.7
|
|
|
$
|
19.5
|
|
|
$
|
4.1
|
|
|
$
|
16.3
|
|
|
$
|
113.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Other operating expenses includes sponsor management fees,
intercompany foreign exchange loss (gain), restructuring consulting
fees, and IPO transaction costs.
|
|
|
|
|
|
Nine Months Ended September 30, 2017
|
|
|
|
As Reported
|
|
|
Share-based compensation
|
|
|
Severance charges
|
|
|
Other operating expenses (1)
|
|
|
Adjusted
|
|
|
|
(Dollars in millions)
|
|
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recurring services
|
|
$
|
145.8
|
|
|
$
|
0.8
|
|
|
$
|
1.7
|
|
|
$
|
-
|
|
|
$
|
143.3
|
|
Professional services and other
|
|
|
102.8
|
|
|
|
0.9
|
|
|
|
0.8
|
|
|
|
-
|
|
|
|
101.1
|
|
Product development and management
|
|
|
31.8
|
|
|
|
0.6
|
|
|
|
0.6
|
|
|
|
-
|
|
|
|
30.6
|
|
Depreciation and amortization
|
|
|
23.2
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
23.2
|
|
Total cost of revenue
|
|
|
303.6
|
|
|
|
2.3
|
|
|
|
3.1
|
|
|
|
-
|
|
|
|
298.2
|
|
Sales and marketing
|
|
|
81.7
|
|
|
|
1.3
|
|
|
|
0.7
|
|
|
|
-
|
|
|
|
79.7
|
|
General and administrative
|
|
|
79.3
|
|
|
|
9.2
|
|
|
|
0.5
|
|
|
|
1.5
|
|
|
|
68.1
|
|
Other expense (income), net
|
|
|
6.9
|
|
|
|
-
|
|
|
|
-
|
|
|
|
7.0
|
|
|
|
(0.1
|
)
|
Operating profit
|
|
|
16.9
|
|
|
|
12.8
|
|
|
|
4.3
|
|
|
|
8.5
|
|
|
|
42.5
|
|
Depreciation and amortization
|
|
|
39.7
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
39.7
|
|
EBITDA from continuing operations
|
|
$
|
56.6
|
|
|
$
|
12.8
|
|
|
$
|
4.3
|
|
|
$
|
8.5
|
|
|
$
|
82.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Other operating expenses includes sponsor management fees,
intercompany foreign exchange loss (gain), and restructuring
consulting fees.
|
|
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20181029005190/en/
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