CDAY Ceridian HCM Holding Inc

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q/A

(Amendment No. 1)

 

☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly reporting period ended June 30, 2023

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Commission file number 001-38467

 

 

Ceridian HCM Holding Inc.

(Exact name of registrant as specified in its charter)

 

Delaware	46-3231686
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification Number)

3311 East Old Shakopee Road

Minneapolis, Minnesota 55425

(952) 853-8100

(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common stock, $0.01 par value		CDAY		New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer	☒		Accelerated filer	☐
Non-accelerated filer	☐		Smaller reporting company	☐
			Emerging growth company	☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as the latest practicable date: 155,612,552 shares of common stock, $0.01 par value per share, as of July 26, 2023.

 

 

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Explanatory Note

Ceridian HCM Holding Inc. (the “Company”) is filing this Amendment No. 1 on Form 10-Q/A (this “Amendment” or “Form 10-Q/A”) to our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2023, which was filed with the U.S. Securities and Exchange Commission (the “SEC”) on August 2, 2023 (the “Original Form 10-Q”) to make certain changes as described below.

 

 

3 | Q2 2023 Form 10-Q/A

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PART I

 

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Management, under the supervision and with the participation of the Chief Executive Officer and Chief Financial Officer, have conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Disclosure controls and procedures are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that as of June 30, 2023, our disclosure controls and procedures were not effective due to the material weaknesses in internal control over financial reporting described below. We have in place and are executing a remediation plan to address the material weaknesses described below.

As discussed in our Annual Report on Form 10-K/A, we identified a material weakness in our internal control over financial reporting as we have determined that our control was not operating effectively to assess the proper presentation of cash and cash equivalents for our Canada customer funds for financial reporting purposes, including the corresponding customer funds and customer funds obligations and related statements of cash flows presentation as of December 31, 2022, which continues to exist as of June 30, 2023. This material weakness was the result of the control operator not appropriately detecting and correcting the error, as a result of insufficient training.

Further, while reassessing the effectiveness of the Company’s internal control over financial reporting, management identified, in the aggregate, a material weakness related to controls over certain Professional Services and Powerpay revenue accounts as of December 31, 2022, which continues to exist as of June 30, 2023, resulting from an ineffective risk assessment process to properly design and implement controls over (1) certain process level activities related to Powerpay revenue, and (2) information technology access pertaining to a system implemented in September 2022 that adversely impacted the accuracy and completeness of information that is used to measure a component of its Professional Services revenue.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

In light of the material weaknesses, management performed additional analyses and other procedures to ensure that our consolidated financial statements were prepared in accordance with U.S. Generally Accepted Accounting Principles ("U.S. GAAP"). Accordingly, management believes that the condensed consolidated financial statements included in the Original Form 10-Q fairly present, in all material respects, our financial position, results of operations, and cash flows as of and for the periods presented, in accordance with U.S. GAAP.

Management’s Plan to Remediate the Identified Material Weaknesses

With regard to the Canada Trust Material Weakness, the Company has implemented an additional control and training to ensure proper classification and presentation of cash and cash equivalents for its Canada customer funds.

In addition, we have enhanced our revenue risk assessment process and information technology general controls to prevent misstatements in Professional Services revenue accounts. We will also implement additional controls to prevent misstatements in Powerpay revenue accounts. We anticipate that the two material weaknesses will be fully remediated before December 31, 2023, but the material weaknesses cannot be considered fully remediated until the improved controls have been in place and operate for a sufficient period of time to enable management to test and to conclude on the operating effectiveness of the controls.

4 | Q2 2023 Form 10-Q/A

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Changes in Internal Control over Financial Reporting

With the exception of the controls implemented in response to the material weaknesses identified above, there were no changes to our internal control over financial reporting during the three months ended June 30, 2023 that have materially affected, or that are reasonably likely to materially affect, our internal controls over financial reporting.

5 | Q2 2023 Form 10-Q/A

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ITEM 6. EXHIBITS

(a) Exhibits

The following exhibits are filed or furnished as a part of this report:

 

Exhibit No.		Description
31.1*		Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1#		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2#		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*		Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).
101.SCH*		Inline XBRL Taxonomy Extension Schema Document.
101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104*		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

 

 

* Filed herewith.

# In accordance with Item 601(b)(32)(ii) of Regulation S-K and SEC Release Nos. 33-8238 and 34-47986, Final Rule: Management’s Reports on Internal Control Over Financial Reporting and Certification of Disclosure in Exchange Act Periodic Reports, the certifications furnished in Exhibits 32.1 and 32.2 hereto are deemed to accompany this Quarterly Report on Form 10-Q/A and will not be deemed “filed” for purpose of Section 18 of the Exchange Act. Such certifications will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.

6 | Q2 2023 Form 10-Q/A

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

	CERIDIAN HCM HOLDING INC.
Date: November 13, 2023	By:	/s/ David D. Ossip
		Name:	David D. Ossip
		Title:	Chief Executive Officer
			(Principal Executive Officer)
Date: November 13, 2023	By:	/s/ Noémie C. Heuland
		Name:	Noémie C. Heuland
		Title:	Executive Vice President and Chief Financial Officer
			(Principal Financial Officer)

 

7 | Q2 2023 Form 10-Q/A

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Exhibit 31.1

CERTIFICATIONS

I, David D. Ossip, certify that:

Date: November 13, 2023

 

By:		/s/ David D. Ossip
		David D. Ossip Chief Executive Officer

 

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Exhibit 31.2

CERTIFICATIONS

I, Noémie C. Heuland, certify that:

Date: November 13, 2023

 

By:		/s/ Noémie C. Heuland
		Noémie C. Heuland Executive Vice President and Chief Financial Officer

 

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Exhibit 32.1

CERTIFICATION OF PERIODIC FINANCIAL REPORTS PURSUANT TO 18 U.S.C. §1350

The undersigned hereby certifies that he is the duly appointed and acting Chief Executive Officer of Ceridian HCM Holding Inc., a Delaware corporation (the “Company”), and hereby further certifies to the best of his knowledge as follows.

In witness whereof, the undersigned has executed and delivered this certificate as of the date set forth opposite his signature below.

Date: November 13, 2023

 

By:		/s/ David D. Ossip
		David D. Ossip
		Chief Executive Officer

This certification accompanies the Form 10-Q/A to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of Ceridian HCM Holding Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-Q/A), irrespective of any general incorporation language contained in such filing.

 

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Exhibit 32.2

CERTIFICATION OF PERIODIC FINANCIAL REPORTS PURSUANT TO 18 U.S.C. §1350

The undersigned hereby certifies that she is the duly appointed and acting Executive Vice President and Chief Financial Officer of Ceridian HCM Holding Inc., a Delaware corporation (the “Company”), and hereby further certifies as follows.

In witness whereof, the undersigned has executed and delivered this certificate as of the date set forth opposite her signature below.

Date: November 13, 2023

 

By:		/s/ Noémie C. Heuland
		Noémie C. Heuland
		Executive Vice President and Chief Financial Officer

This certification accompanies the Form 10-Q/A to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of Ceridian HCM Holding Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-Q/A), irrespective of any general incorporation language contained in such filing.

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v3.23.3

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2023	Jul. 26, 2023
Cover [Abstract]
Document Type	10-Q/A
Amendment Flag	true
Document Period End Date	Jun. 30, 2023
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q2
Trading Symbol	CDAY
Title of 12(b) Security	Common stock, $0.01 par value
Security Exchange Name	NYSE
Entity Registrant Name	Ceridian HCM Holding Inc.
Entity Central Index Key	0001725057
Entity Current Reporting Status	Yes
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Shell Company	false
Entity Interactive Data Current	Yes
Document Quarterly Report	true
Document Transition Report	false
Entity File Number	001-38467
Entity Incorporation State Country Code	DE
Entity Tax Identification Number	46-3231686
Entity Address Address Line1	3311 East Old Shakopee Road
Entity Address City Or Town	Minneapolis
Entity Address State Or Province	MN
Entity Address Postal Zip Code	55425
City Area Code	952
Local Phone Number	853-8100
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		155,612,552
Amendment Description	Ceridian HCM Holding Inc. (the “Company”) is filing this Amendment No. 1 on Form 10-Q/A (this “Amendment” or “Form 10-Q/A”) to our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2023, which was filed with the U.S. Securities and Exchange Commission (the “SEC”) on August 2, 2023 (the “Original Form 10-Q”) to make certain changes as described below.  BackgroundAs previously disclosed in the Company’s earnings press release furnished as an exhibit to the Current Report on Form 8-K furnished with the SEC on November 1, 2023, the Company recently discovered an error in the presentation of one Canadian bank account balance within “customer funds” and “customer funds obligations” and related items on the Company’s condensed consolidated balance sheets as of June 30, 2023 and December 31, 2022 and in the Company’s net cash provided by financing activities within its condensed consolidated statements of cash flows for the six months ended June 30, 2023 and 2022. There was an understatement of customer funds within current assets and a corresponding understatement of customer funds obligations within current liabilities on the Company’s condensed consolidated balance sheets. As a result, the Company also erroneously presented certain changes related to customer funds and customer funds obligations on the Company’s condensed consolidated statements of cash flows.However, the Company determined that the incorrect presentation did not result in a material misstatement of the Company’s financial statements and, accordingly, it does not need to restate its previously issued financial statements contained in the Original Form 10-Q, in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 or in the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023. Considering the foregoing, management reassessed the effectiveness of the Company’s internal control over financial reporting (“ICFR”) as of December 31, 2022, based on the framework established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. As a result of that reassessment, management identified a material weakness in its ICFR as the Company has determined that its control designed to assess the proper presentation of cash and cash equivalents for its Canada customer funds for financial reporting purposes was ineffective (“Canada Trust Material Weakness”). With regard to the Canada Trust Material Weakness, the Company has implemented an additional control and training to ensure proper classification and presentation of cash and cash equivalents for its Canada customer funds. The Company expects the Canada Trust Material Weakness will be fully remediated before December 31, 2023, but remediation will not be considered complete until the applicable controls operate for a sufficient period of time subsequent to the additional training to enable management to test and to conclude on the operating effectiveness of the control.Further, while reassessing the effectiveness of the Company’s ICFR, management identified, in the aggregate, a material weakness related to controls over certain Professional Services and Powerpay revenue accounts as of December 31, 2022 (the "Risk Assessment Material Weakness"). The Company has enhanced its risk assessment process and information technology general controls to prevent misstatements in Professional Services revenue accounts. The Company also expects to implement additional controls to prevent misstatements in Powerpay revenue accounts. The Company expects the Risk Assessment Material Weakness will be fully remediated before December 31, 2023, but remediation will not be considered complete until the applicable controls operate for a sufficient period of time to enable management to test and to conclude on the operating effectiveness of the controls.In light of the Canada Trust Material Weakness and the Risk Assessment Material Weakness, which continue to exist as of June 30, 2023, the Company has performed additional analyses and other procedures to enable management to conclude that the existence of the material weaknesses did not result in a material misstatement of the Company’s previously issued financial statements.As a result of the Canada Trust Material Weakness and the Risk Assessment Material Weakness, the Company concluded that its disclosure controls and procedures and ICFR were ineffective as of June 30, 2023. As a result, the Company is amending and restating Part I, Item 4 Controls and Procedures in this Form 10-Q/A to update its conclusions regarding the effectiveness of its disclosure controls and procedures and its internal control over financial reporting as of June 30, 2023 a result of the material weaknesses. In accordance with Rule 12b-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Company is also including with this Form 10-Q/A certifications of the Company’s principal executive officer and principal financial officer (included in Part II, Item 6. “Exhibits” and attached as Exhibits 31.1, 31.2, 32.1, and 32.2). This Form 10-Q/A should be read in conjunction with the Original Form 10-Q, which continues to speak as of the date of the Original Form 10-Q. Except as specifically noted above, this Form 10-Q/A does not modify or update disclosures in the Original Form 10-Q. Accordingly, this Form 10-Q/A does not reflect events occurring after the filing of the Original Form 10-Q or modify or update any related or other disclosures, other than those discussed above. No other portions of the Original Form 10-Q were changed.Amendments of 2022 Annual Report on Form 10-K and 2023 Quarterly Report on Form 10-Q In addition to this Form 10-Q/A, the Company is concurrently filing amendments to its Annual Report on Form 10-K for the year ended December 31, 2022 and Quarterly Report on Form 10-Q for the period ended March 31, 2023.

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