PAYX - Paychex, Inc. - Q4 2013 Earnings Call Transcript

    Company Name:Paychex, Inc.
    Event Title:Q4 2013 Earnings Call Transcript
    Event Date:27-Jun-2013
    Event Time:10:30 AM ET



    Welcome and thank you for standing by. At this time all participants are in a listen-only mode. [Operator Instructions]. Today's conference is being recorded. If anyone has any objection you may disconnect at this time. I would now like to introduce President and Chief Executive Officer, Mr. Martin Mucci.

    Martin Mucci

    President and Chief Executive Officer
    Great. Thank you and thank you for joining us for a discussion of the Paychex's Fiscal 2013 year-end earnings . Joining me today is Efrain Rivera, our Chief Financial Officer. Yesterday afternoon after the market closed we released our financial results for the fourth quarter and fiscal year ended May 31, 2013.

    We also filed and 8-K filing which includes preliminary discussion and analysis of our results of operations and financial position. This preliminary discussion and analysis is not a complete management's discussions and analysis, a complete MD&A will be included in our Form 10-K which we expect to file by the end of July. These documents are available by accessing our Investor Relations page at This teleconference is being broadcast over the Internet as well and will be archived and available on our website for about one month.

    On today's call, I will review the fourth quarter and fiscal 2013 highlights and our operation sales and product development and Efrain will review our fourth quarter and fiscal 2013 financial results in more detail and discuss our fiscal 2014 guidance then we will open it up for your questions.

    Let me start by saying I feel we had a strong fourth quarter and the solid financial performance for fiscal 2013 as a whole Efrain will go into more detail however I would like to provide you with some of the highlights.

    Our checks per payroll have improved for '13 consecutive quarters growth in checks per payroll have been consistently positive this year we did some moderation in the rate of growth in the fourth quarter.

    Our execution in operations has been excellent. Demonstrated by achievement of the highest client satisfaction scores in our history, it is our exceptional client service along with our leading edge technology that really sets us apart in Paychex.

    The dedication of our employees has also resulted in our best year ever in client retention exceeding 81% of our beginning payroll client base . Over the past few years, we've increased our focus on sale execution and expansion opportunities and we are pleased with the results for fiscal 2013. We opened new territories focused on market segmentation in payroll as well as 401(k), we also increased our involvement in franchise and banking referral opportunities creating expanded relationships with Subway and Tim Hortons on the franchise side as well Citizens Union Bank to name a few on the banking side.

    From a sales perspective we has a strong fourth quarter and we're particularly pleased with the new sales revenue generated from our core payroll sales , retirement services, HR outsourcing and payroll teams.

    Our client base in payroll finished the year at 570,000 payroll clients an increase of approximately 1%. This growth is consistent with the prior year. Revenue per client was another positive factor in our payroll revenue growth. From a technology perspective we are integrating our leading technology and mobility platform with our world-class customer service through the Paychex's next generation suite.

    This technology creates an integrated workforce management tool for our mid-market clients by brining together the services those clients need including our small and mid-market payroll products and various human resource and employee benefit management services. We have being positioning Paychex to capture the opportunity or rise -- increasing shift to the online SaaS solutions.

    We have market-leading solutions leveraging the latest technologies and continue to invest heavily in product development relating to our SaaS and online capabilities and mobile applications. Our recent acquisitions of ExpenseWire and have SaaSoriented business models in an addition our share payroll product continues to do well with strong sales and revenue growth we enhanced our online and mobile offering during the fiscal year by adding greater value and convenience for our clients we introduced the best in class online report center and builder in the fall and most recently added flexible spending account in health and benefits employee and employer information to our mobility apps and we will continue to add more capabilities in the future.

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