Automatic Data Processing, Inc. (NASDAQ: ADP) is a global provider of integrated computing and business outsourcing. ADP has nearly $9 billion in revenues[2] and approximately 570,000 clients.[3] ADP offers a range of HR, payroll, tax and benefits administration. ADP is headquartered in Roseland, New Jersey.
Automatic Data Processing, Inc. (ADP), incorporated in 1961, is engaged in providing business outsourcing solutions. ADP offers a range of human resource (HR), payroll, tax and benefits administration solutions from a single source. ADP is also a provider of integrated computing solutions to automotive, truck, motorcycle, marine, recreational vehicle and heavy machinery dealers worldwide. The Company’s segment includes Employer Services, Professional Employer Organization (PEO) Services and Dealer Services. In August 2010, ADP completed the acquisition of two businesses, Cobalt and Workscape, Inc. During the fiscal year ended June 30, 2010 (fiscal 2010), the Company also acquired DO2 Technologies Inc., OneClick HR plc and Workscape, Inc. In March 2011, the Company acquired AdvancedMD.
Employer Services
Employer Services offers a range of HR information, payroll processing, tax and benefits administration solutions and services, including traditional and Web-based outsourcing solutions, that assist employers in the United States, Canada, Europe, South America (primarily Brazil), Australia and Asia to staff, manage, pay and retain their employees. As of June 30, 2010, Employer Services assisted approximately 520,000 employers with approximately 614,000 payrolls. Employer Services markets these solutions and services through its direct marketing salesforce and, on a limited basis, through indirect sales channels, such as marketing relationships with banks and accountants. In fiscal 2010, 80% of Employer Services’ revenues were from the United States, 13% were from Europe, 5% were from Canada and 2% were from South America (primarily Brazil), Australia and Asia.
ADP provides payroll services that include the preparation of client employee paychecks, electronic direct deposits and stored value payroll cards, along with employee pay statements, supporting journals, summaries and management reports. ADP also supplies the quarterly and annual social security, medicare and federal, state and local income tax withholding reports required to be filed by employers. ADP offers its integrated comprehensive outsourcing services (COS) solution that allows larger clients to outsource to ADP HR, payroll, payroll administration, employee service center, benefits administration, and time and labor management functions. For mid-sized clients, ADP Workforce Now Comprehensive Services provides integrated tools and technology to support payroll, HR guidance and HR administration needs from recruitment to retirement. ADP also offers ADP Resource, an integrated, flexible HR and payroll service offering for smaller clients that provides a menu of optional services, such as 401(k), FSA and a Pay-by-Pay workers’ compensation payment program.
ADP’s Added Value Services division includes Tax and Financial Services, Insurance Services and Tax Credit Services. Tax and Financial Services processes and collects federal, state and local payroll taxes on behalf of, and from, ADP clients and remits these taxes to the appropriate taxing authorities. Insurance Services provides a Pay-by-Pay workers’ compensation payment program and, through Automatic Data Processing Insurance Agency, Inc., offers workers compensation and group health insurance to small and mid-sized clients. Tax Credit Services provides job tax credit services that assist employers in the identification of, and filing for, federal, state and local tax credits and other incentives based on geography and demographics, and includes negotiation of incentive packages with applicable governmental agencies.
Employer Services provides Retirement Services, Pre-Employment Services, ADP’s Benefit Services, ADP’s Time and Labor Management Services and ADP’s Talent Management solutions. Retirement Services provides recordkeeping and/or related administrative services with respect to various types of retirement (primarily 401(k) and SIMPLE IRA) plans, deferred compensation plans and premium only cafeteria plans. Pre-Employment Services includes Screening and selection services and applicant management services. Screening and selection services provide background checks, reference verifications and an HR help desk.
Applicant management services provide employers with a Web-based solution to manage their talent throughout their lifecycle. ADP’s benefit services provide benefits administration across all market segments, including management of open enrollment and ongoing enrollment of benefits, and leave of absence, COBRA and FSA administration. ADP’s Time and Labor Management Services provides solutions for employers to capture, calculate and report employee time and attendance. ADP’s Talent Management solutions include performance management, compensation management and learning management.
Professional Employer Organization Services
In the United States, ADP’s TotalSource, the Company’s professional employer organization (PEO) business, provides approximately 5,600 clients with employment administration outsourcing solutions through a co-employment relationship, including payroll, payroll tax filing, HR guidance, 401(k) plan administration, benefits administration, compliance services, health and workers’ compensation coverage and other supplemental benefits for employees. ADP’s TotalSource has 47 offices located in 22 states and serves approximately 211,000 worksite employees in all 50 states.
Dealer Services
Dealer Services provides integrated dealer management systems (such a system is also known in the industry as a DMS) and other business management solutions to automotive, truck, motorcycle, marine, recreational vehicle (RV) and heavy machinery retailers in North America, Europe, Africa and the Asia Pacific region. Clients use ADP’s DMS solutions to manage core business activities, such as accounting, inventory management, factory communications, appointment scheduling, vehicle financing and insurance, sales and service. In addition to its DMS solutions, Dealer Services offers its clients a suite of additional integrated applications to address each department and functional area of the dealership, including Customer Relationship Management (CRM) applications, front-end sales and marketing/advertising solutions, and an Internet protocol (IP) Telephony phone system fully-integrated into the DMS to help dealerships drive sales processes and business development initiatives. Dealer Services also provides its dealership clients computer hardware, hardware maintenance services, software support, system design and network consulting services.
Dealer Services designs, establishes and maintains communications networks for its dealership clients that allow interactive communications among multiple site locations, as well as links between franchised dealers and their vehicle manufacturer franchisors. These networks are used for activities, such as new vehicle ordering and status inquiry, warranty submission and validation, parts and vehicle locating, dealership customer credit application submission and decision-making, vehicle repair estimation and acquisition of vehicle registration and lien holder information. All of Dealer Services’ solutions are supported by training offerings and business process consulting services. ADP’s DMS and other software solutions are available as onsite applications installed at the dealership or as application service provider (ASP) managed services solutions (in which clients outsource their information technology management activities to Dealer Services).
The Company competes with The Reynolds & Reynolds Company.
The rapid evolution of computer technology in the 1990s provided ADP with a golden opportunity to expand many of its core products and services. By mid-decade, the Internet had made it possible for a company to manage all aspects of its finances, from payroll to banking, on a personal computer. The intricacies involved with mastering this new technology, however, combined with the increasing complexity of benefits packages and tax laws, was turning accounting into a major headache for small and mid-sized business owners. Rather than trying to handle the problem on their own, many of these companies began turning to outside firms to handle their bookkeeping needs.
It was in this atmosphere that ADP began developing a host of services designed to help employers integrate these new technologies into their day-to-day operations. The company set the stage for this transition when it acquired a bank charter in 1995. The Interstate Banking and Branching Efficiency Act of 1994 had already removed limitations on interstate banking, and so the charter provided ADP with the opportunity to augment its payroll business with loan processing, bill payment, and investment services. From the point of view of cost, the transition was a relatively easy one: The expense of maintaining a banking web site was negligible and did not require a complete overhaul of the company's infrastructure. The challenge for ADP was to create services unique enough to draw customers away from the traditional bank branches.
One of ADP's first new offerings arose out of its merger with Checkfree Corp. in July 1995. Through this venture, the company introduced its electronic banking service, providing small businesses with a convenient, affordable way to pay bills and balance accounts online. The company built upon this innovation when it formed its Electronic Banking Unit in 1997, which established partnerships with banks and software designers to create a centralized, web-based banking resource center. By making financial products and services readily available online, the resource center could offer valuable support to business owners looking for a way to cut administrative costs. ADP PayExpert, the industry's first complete payroll processing service, was introduced in 1998, and in 1999 the company created Solution Profiler, a program designed to allow small businesses to customize their payroll service.
This heightened focus on small businesses did not mean ADP was neglecting its larger clients. In 2000 it launched ADP Enterprise Payroll Services, which offered a comprehensive web-based payroll and accounting platform for corporations with more than one location. That same year it launched Accountant Advantage, a referral network that allowed accounting firms to market ADP's payroll products. The company also remained dedicated to global expansion, solidifying its foothold in the burgeoning Asian payroll processing business with the acquisition of the Australian firm PayConnect Solutions, the largest payroll processor in the Asia/Pacific market, in July 2000. Heading into the new century, however, it was clear that the small business sector was the area with the largest potential for growth. With research data indicating that payroll services for small businesses would blossom into a $4 billion industry by 2000, ADP was determined to put itself in position to become the undisputed leader in this promising new market.
Principal Divisions: ADP Employer Services; ADP Brokerage Services; ADP Dealer Services; ADP Claims Services.
Principal Competitors: Administaff, Inc.; Ceridian Corporation; Paychex, Inc.
OVERALL
Beta: 0.67
Market Cap (Mil.): $26,985.21
Shares Outstanding (Mil.): 496.42
Annual Dividend: 1.44
Yield (%): 2.65
FINANCIALS
ADP.O Industry Sector
P/E (TTM): 23.38 9.66 17.05
EPS (TTM): -12.97 -- --
ROI: 16.41 2.85 3.26
ROE: 20.24 4.85 5.84
Statistics:
Public Company
Incorporated: 1949
Employees: 41,000
Sales: $7.02 billion (2001)
Stock Exchanges: New York Chicago Pacific Philadelphia Boston
NAIC: 514210 Data Processing Services; 511210 Software Publishers; 334611 Software Reproducing; 541211 Offices of Certified Public Accountants; 541214 Payroll Services (pt); 541219 Other Accounting Services
Key Dates:
1949: Henry Taub forms Automatic Payrolls, Inc.
1953: Frank R. Lautenberg joins Automatic Payrolls.
1957: Automatic Payrolls switches from manual bookkeeping machines to an IBM computer.
1961: Automatic Data Processing is formed.
1972: ADP acquires CSI Computer Systems.
1983: ADP acquires GTE's Telenet Information Services.
1992: ADP takes over Bank of America's payroll services.
1997: ADP forms Electronic Banking Unit.
Name Age Since Current Position
Brun, Leslie 58 2007 Independent Non-Executive Chairman of the Board
Butler, Gary 64 2006 President, Chief Executive Officer, Director
Reidy, Christopher 53 2006 Chief Financial Officer, Vice President
Anenen, Steven 57 2004 President - Dealer Services
Siegmund, Jan 46 2009 President - Added Value Services, Chief Strategy Officer
Lee, Regina 53 2010 President - Employer Services– Small Business 1982 Services and Major Account Services
Rodriguez, Carlos 46 2010 President - Employer Services National Account Services and Employer Services, International
Rajparia, Anish 39 2009 President - Employer Services, International
Capone, Michael 43 2008 Vice President, Chief Information Officer
Bonarti, Michael 45 2010 Vice President, General Counsel, Secretary
Eberhard, Michael 48 2009 Vice President, Treasurer
Flynn, Edward 50 2009 Vice President - Employer Services, Sales
Cachinero, Benito 52 2007 Vice President - Human Resources
Sheiness, Alan 52 2007 Principal Accounting Officer, Corporate Controller
Cooperman, Leon 67 1991 Director
Brenneman, Gregory 49 2001 Director
Hubbard, Robert 53 2004 Director
Jones, John 60 2005 Director
Fast, Eric 61 2007 Director
Summe, Gregory 54 2007 Director
Rowlands, Sharon 53 2008 Director
Gooden, Linda 57 2009 Director
Salem, Enrique 44 2010 Director
Address:
One ADP Boulevard
Roseland, New Jersey 07068-1728
U.S.A.
Automatic Data Processing, Inc. (ADP), incorporated in 1961, is engaged in providing business outsourcing solutions. ADP offers a range of human resource (HR), payroll, tax and benefits administration solutions from a single source. ADP is also a provider of integrated computing solutions to automotive, truck, motorcycle, marine, recreational vehicle and heavy machinery dealers worldwide. The Company’s segment includes Employer Services, Professional Employer Organization (PEO) Services and Dealer Services. In August 2010, ADP completed the acquisition of two businesses, Cobalt and Workscape, Inc. During the fiscal year ended June 30, 2010 (fiscal 2010), the Company also acquired DO2 Technologies Inc., OneClick HR plc and Workscape, Inc. In March 2011, the Company acquired AdvancedMD.
Employer Services
Employer Services offers a range of HR information, payroll processing, tax and benefits administration solutions and services, including traditional and Web-based outsourcing solutions, that assist employers in the United States, Canada, Europe, South America (primarily Brazil), Australia and Asia to staff, manage, pay and retain their employees. As of June 30, 2010, Employer Services assisted approximately 520,000 employers with approximately 614,000 payrolls. Employer Services markets these solutions and services through its direct marketing salesforce and, on a limited basis, through indirect sales channels, such as marketing relationships with banks and accountants. In fiscal 2010, 80% of Employer Services’ revenues were from the United States, 13% were from Europe, 5% were from Canada and 2% were from South America (primarily Brazil), Australia and Asia.
ADP provides payroll services that include the preparation of client employee paychecks, electronic direct deposits and stored value payroll cards, along with employee pay statements, supporting journals, summaries and management reports. ADP also supplies the quarterly and annual social security, medicare and federal, state and local income tax withholding reports required to be filed by employers. ADP offers its integrated comprehensive outsourcing services (COS) solution that allows larger clients to outsource to ADP HR, payroll, payroll administration, employee service center, benefits administration, and time and labor management functions. For mid-sized clients, ADP Workforce Now Comprehensive Services provides integrated tools and technology to support payroll, HR guidance and HR administration needs from recruitment to retirement. ADP also offers ADP Resource, an integrated, flexible HR and payroll service offering for smaller clients that provides a menu of optional services, such as 401(k), FSA and a Pay-by-Pay workers’ compensation payment program.
ADP’s Added Value Services division includes Tax and Financial Services, Insurance Services and Tax Credit Services. Tax and Financial Services processes and collects federal, state and local payroll taxes on behalf of, and from, ADP clients and remits these taxes to the appropriate taxing authorities. Insurance Services provides a Pay-by-Pay workers’ compensation payment program and, through Automatic Data Processing Insurance Agency, Inc., offers workers compensation and group health insurance to small and mid-sized clients. Tax Credit Services provides job tax credit services that assist employers in the identification of, and filing for, federal, state and local tax credits and other incentives based on geography and demographics, and includes negotiation of incentive packages with applicable governmental agencies.
Employer Services provides Retirement Services, Pre-Employment Services, ADP’s Benefit Services, ADP’s Time and Labor Management Services and ADP’s Talent Management solutions. Retirement Services provides recordkeeping and/or related administrative services with respect to various types of retirement (primarily 401(k) and SIMPLE IRA) plans, deferred compensation plans and premium only cafeteria plans. Pre-Employment Services includes Screening and selection services and applicant management services. Screening and selection services provide background checks, reference verifications and an HR help desk.
Applicant management services provide employers with a Web-based solution to manage their talent throughout their lifecycle. ADP’s benefit services provide benefits administration across all market segments, including management of open enrollment and ongoing enrollment of benefits, and leave of absence, COBRA and FSA administration. ADP’s Time and Labor Management Services provides solutions for employers to capture, calculate and report employee time and attendance. ADP’s Talent Management solutions include performance management, compensation management and learning management.
Professional Employer Organization Services
In the United States, ADP’s TotalSource, the Company’s professional employer organization (PEO) business, provides approximately 5,600 clients with employment administration outsourcing solutions through a co-employment relationship, including payroll, payroll tax filing, HR guidance, 401(k) plan administration, benefits administration, compliance services, health and workers’ compensation coverage and other supplemental benefits for employees. ADP’s TotalSource has 47 offices located in 22 states and serves approximately 211,000 worksite employees in all 50 states.
Dealer Services
Dealer Services provides integrated dealer management systems (such a system is also known in the industry as a DMS) and other business management solutions to automotive, truck, motorcycle, marine, recreational vehicle (RV) and heavy machinery retailers in North America, Europe, Africa and the Asia Pacific region. Clients use ADP’s DMS solutions to manage core business activities, such as accounting, inventory management, factory communications, appointment scheduling, vehicle financing and insurance, sales and service. In addition to its DMS solutions, Dealer Services offers its clients a suite of additional integrated applications to address each department and functional area of the dealership, including Customer Relationship Management (CRM) applications, front-end sales and marketing/advertising solutions, and an Internet protocol (IP) Telephony phone system fully-integrated into the DMS to help dealerships drive sales processes and business development initiatives. Dealer Services also provides its dealership clients computer hardware, hardware maintenance services, software support, system design and network consulting services.
Dealer Services designs, establishes and maintains communications networks for its dealership clients that allow interactive communications among multiple site locations, as well as links between franchised dealers and their vehicle manufacturer franchisors. These networks are used for activities, such as new vehicle ordering and status inquiry, warranty submission and validation, parts and vehicle locating, dealership customer credit application submission and decision-making, vehicle repair estimation and acquisition of vehicle registration and lien holder information. All of Dealer Services’ solutions are supported by training offerings and business process consulting services. ADP’s DMS and other software solutions are available as onsite applications installed at the dealership or as application service provider (ASP) managed services solutions (in which clients outsource their information technology management activities to Dealer Services).
The Company competes with The Reynolds & Reynolds Company.
The rapid evolution of computer technology in the 1990s provided ADP with a golden opportunity to expand many of its core products and services. By mid-decade, the Internet had made it possible for a company to manage all aspects of its finances, from payroll to banking, on a personal computer. The intricacies involved with mastering this new technology, however, combined with the increasing complexity of benefits packages and tax laws, was turning accounting into a major headache for small and mid-sized business owners. Rather than trying to handle the problem on their own, many of these companies began turning to outside firms to handle their bookkeeping needs.
It was in this atmosphere that ADP began developing a host of services designed to help employers integrate these new technologies into their day-to-day operations. The company set the stage for this transition when it acquired a bank charter in 1995. The Interstate Banking and Branching Efficiency Act of 1994 had already removed limitations on interstate banking, and so the charter provided ADP with the opportunity to augment its payroll business with loan processing, bill payment, and investment services. From the point of view of cost, the transition was a relatively easy one: The expense of maintaining a banking web site was negligible and did not require a complete overhaul of the company's infrastructure. The challenge for ADP was to create services unique enough to draw customers away from the traditional bank branches.
One of ADP's first new offerings arose out of its merger with Checkfree Corp. in July 1995. Through this venture, the company introduced its electronic banking service, providing small businesses with a convenient, affordable way to pay bills and balance accounts online. The company built upon this innovation when it formed its Electronic Banking Unit in 1997, which established partnerships with banks and software designers to create a centralized, web-based banking resource center. By making financial products and services readily available online, the resource center could offer valuable support to business owners looking for a way to cut administrative costs. ADP PayExpert, the industry's first complete payroll processing service, was introduced in 1998, and in 1999 the company created Solution Profiler, a program designed to allow small businesses to customize their payroll service.
This heightened focus on small businesses did not mean ADP was neglecting its larger clients. In 2000 it launched ADP Enterprise Payroll Services, which offered a comprehensive web-based payroll and accounting platform for corporations with more than one location. That same year it launched Accountant Advantage, a referral network that allowed accounting firms to market ADP's payroll products. The company also remained dedicated to global expansion, solidifying its foothold in the burgeoning Asian payroll processing business with the acquisition of the Australian firm PayConnect Solutions, the largest payroll processor in the Asia/Pacific market, in July 2000. Heading into the new century, however, it was clear that the small business sector was the area with the largest potential for growth. With research data indicating that payroll services for small businesses would blossom into a $4 billion industry by 2000, ADP was determined to put itself in position to become the undisputed leader in this promising new market.
Principal Divisions: ADP Employer Services; ADP Brokerage Services; ADP Dealer Services; ADP Claims Services.
Principal Competitors: Administaff, Inc.; Ceridian Corporation; Paychex, Inc.
OVERALL
Beta: 0.67
Market Cap (Mil.): $26,985.21
Shares Outstanding (Mil.): 496.42
Annual Dividend: 1.44
Yield (%): 2.65
FINANCIALS
ADP.O Industry Sector
P/E (TTM): 23.38 9.66 17.05
EPS (TTM): -12.97 -- --
ROI: 16.41 2.85 3.26
ROE: 20.24 4.85 5.84
Statistics:
Public Company
Incorporated: 1949
Employees: 41,000
Sales: $7.02 billion (2001)
Stock Exchanges: New York Chicago Pacific Philadelphia Boston
NAIC: 514210 Data Processing Services; 511210 Software Publishers; 334611 Software Reproducing; 541211 Offices of Certified Public Accountants; 541214 Payroll Services (pt); 541219 Other Accounting Services
Key Dates:
1949: Henry Taub forms Automatic Payrolls, Inc.
1953: Frank R. Lautenberg joins Automatic Payrolls.
1957: Automatic Payrolls switches from manual bookkeeping machines to an IBM computer.
1961: Automatic Data Processing is formed.
1972: ADP acquires CSI Computer Systems.
1983: ADP acquires GTE's Telenet Information Services.
1992: ADP takes over Bank of America's payroll services.
1997: ADP forms Electronic Banking Unit.
Name Age Since Current Position
Brun, Leslie 58 2007 Independent Non-Executive Chairman of the Board
Butler, Gary 64 2006 President, Chief Executive Officer, Director
Reidy, Christopher 53 2006 Chief Financial Officer, Vice President
Anenen, Steven 57 2004 President - Dealer Services
Siegmund, Jan 46 2009 President - Added Value Services, Chief Strategy Officer
Lee, Regina 53 2010 President - Employer Services– Small Business 1982 Services and Major Account Services
Rodriguez, Carlos 46 2010 President - Employer Services National Account Services and Employer Services, International
Rajparia, Anish 39 2009 President - Employer Services, International
Capone, Michael 43 2008 Vice President, Chief Information Officer
Bonarti, Michael 45 2010 Vice President, General Counsel, Secretary
Eberhard, Michael 48 2009 Vice President, Treasurer
Flynn, Edward 50 2009 Vice President - Employer Services, Sales
Cachinero, Benito 52 2007 Vice President - Human Resources
Sheiness, Alan 52 2007 Principal Accounting Officer, Corporate Controller
Cooperman, Leon 67 1991 Director
Brenneman, Gregory 49 2001 Director
Hubbard, Robert 53 2004 Director
Jones, John 60 2005 Director
Fast, Eric 61 2007 Director
Summe, Gregory 54 2007 Director
Rowlands, Sharon 53 2008 Director
Gooden, Linda 57 2009 Director
Salem, Enrique 44 2010 Director
Address:
One ADP Boulevard
Roseland, New Jersey 07068-1728
U.S.A.