That characterization by CFO Efrain Rivera included a forecast operations will improve continually. through fiscal 2021. The fourth quarter, he continued, will look more like a pre-COVID-19 quarter.
For the most recently ended quarter, net income was $220.7 million, down 4 percent from $240.6 million a year ago. Revenue was $915.1 million, compared to $980.4 million the prior year. With the strong start to the fiscal 2020 before the virus shutdowns, net income was $1.1 billion for the recently completed year, an increase pf 6 percent from $1.034 billion the prior year. Revenue for fiscal 2020 reached $4.04 billion, a 7-percent rise from $3.77 billioin in fiscal 2019.
The purchase of Oasis Group Holdings contributed about 4 percent to growth for the year.
CEO Martin Mucci said performance is improving each week with business re-openings. “We are seeing businesses come back,” he said. “They are not always coming back with full employment.” He said more than half the businesses which had suspended payroll processing have resumed.
Paychex has not seen an impact from states now closing businesses because of the virus’ spread. Mucci said residential and commercial construction remains strong, particularly in the south. However, he said some impact is likely in the hospitality business with the closing of bars and restaurants in those states.
The company had limited discretionary spending and accelerating a range of cost-saving efforts. That includes a $40-million charge to be taken in the first half as Paychex decided to accelerate its plan to consolidate facilities. Cost-savings include layoffs of less than 2 percent of the company workforce.
Mucci noted because of the ability of employees to work remotely the practice has been to let experience employees work from home when a facility has closed. Paychex discovered in those cases “client satisfaction went up.”