Paychex 2011 Annual Report Download - page 23

Seasonality
There is no significant seasonality to our business. However, during our third fiscal quarter, which ends in
February, the number of new payroll clients, new retirement services clients, and new Paychex HR Solutions
worksite employees tends to be higher than during the rest of the fiscal year, primarily because a majority of new
clients begin using our services in the beginning of a calendar year. In addition, calendar year-end transaction
processing and client funds activity are traditionally higher during our third fiscal quarter due to clients paying year-
end bonuses and requesting additional year-end services. Historically, as a result of these factors, our total revenue
has been slightly higher in our third fiscal quarter, with greater sales commission expenses also reported in this
quarter.
Other
We are subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”). Therefore, we file periodic reports, proxy statements, and other information with the SEC. Such
reports may be read and copied at the SEC’s Public Reference Room at 100 F Street NE, Washington, D.C. 20549.
Information regarding the operation of the Public Reference Room may be obtained by calling the SEC at (800)
SEC-0330. The SEC also maintains a website (www.sec.gov) that includes our reports, proxy statements, and other
information.
Information about our services and products, stockholder information, press releases, and filings with the SEC
can be found on our website at www.paychex.com. Our Form 10-Ks, Quarterly Reports on Form 10-Q, Current
Reports on Form 8-K, and other SEC filings, and any amendments to such reports and filings, are made available,
free of charge, on the Investor Relations section of our website as soon as reasonably practical after such material is
filed with, or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act to, the SEC. Also, copies of our
Annual Report to Stockholders and Proxy Statement, to be issued in connection with our 2011 Annual Meeting of
Stockholders, will be made available, free of charge, upon written request submitted to Paychex, Inc., c/o Corporate
Secretary, 911 Panorama Trail South, Rochester, New York 14625-2396.
Item 1A. Risk Factors
Our future results of operations are subject to a number of risks and uncertainties. These risks and uncertainties
could cause actual results to differ materially from historical and current results and from our projections. Important
factors known to us that could cause such differences include, but are not limited to, those discussed below and those
contained in the “Safe Harbor” statement at the beginning of Part I of this Form 10-K.
Our services may be adversely impacted by changes in government regulations and policies: Many of our
services, particularly payroll tax administration services and employee benefit plan administration services, are
designed according to government regulations that continually change. Changes in regulations could affect the
extent and type of benefits employers are required, or may choose, to provide employees or the amount and type of
taxes employers and employees are required to pay. Such changes could reduce or eliminate the need for some of
our services and substantially decrease our revenue. Added requirements could also increase our cost of doing
business. Failure to educate and assist our clients regarding new or revised legislation that impacts them could have
an adverse impact on our reputation. Failure by us to modify our services in a timely fashion in response to
regulatory changes could have a material adverse effect on our business and results of operations.
Our interest earned on funds held for clients may be impacted by changes in government regulations
mandating the amount of tax withheld or timing of remittance: We receive interest income from investing client
funds collected but not yet remitted to applicable tax or regulatory agencies or to client employees. A change in
regulations either decreasing the amount of taxes to be withheld or allowing less time to remit taxes to applicable tax
or regulatory agencies would adversely impact this interest income.
We may not be able to keep pace with changes in technology: To maintain our growth strategy, we must
adapt and respond to technological advances and technological requirements of our clients. Our future success will
depend on our ability to enhance capabilities and increase the performance of our internal use systems, particularly
our systems that meet our clients’ requirements. We continue to make significant investments related to the
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