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Paychex Inc. F3Q08 (Qtr End 2/29/08) Earnings Call Transcript

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2008-03-27 15:26:09.0

Tags: Paychex Inc.

Question-and-Answer Session

Operator

Thank you. (Operator Instructions) Our first question is from Rod Bourgeois from Bernstein.

Rod Bourgeois - Bernstein Research

Hey guys, I wanted to follow up on the comments, particularly about the weak selling season that you’ve had over the last couple of months. Can you give us any way to dimension how weak the sales were and any way to gauge to what extent that could impact your revenue growth going forward. And I guess a specific question on that front would be, can you tell us how much of your next 12 months revenues are contingent upon the selling that has taken place over the last three months, just to give us a way to dimension your commentary about the weak selling season.

Jonathan Judge

Yes, well first of all I said difficult, I didn’t say weak. I don’t know, I didn’t catch whether Jon said weak; but to put it in perspective, what it is that I do is, I look at where we were this year versus last year, which will help you. What you’re trying to do is to project out if we had some issues in the quarter, I was out to project out to the next several years. When I look at this year versus last year and how we did relative to the plan last year versus this year, what we’re talking about from a difficulty standpoint is a matter of a couple of percentage points, so you’re not talking about an enormous number by any stretch of the imagination. You’re really just talking about a more difficult season this year than last. In general, when you think about what impact sales has on any given calendar year, the normal rule of thumb that we use is that, the sales in a current environment or a current year normally will rarely have an impact of more than 10 or 15% of our revenue.

Rod Bourgeois - Bernstein Research

Okay. And so, when you say it was difficult, I mean is there any way to quantify what your sales were in the last three months maybe versus a year ago period, just to give us a baseline for that?

Jonathan Judge

Well, I did. When I told you that you’re talking about, we don’t talk about what the actual sales performance was, we always give you penile performance which is the actual revenue, not the selling revenue. But, what I told you was, to give you an option to kind of understand the difference; I said it was a couple of percentage points one way or the other.

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