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Global Payments Reports First Quarter Earnings
ATLANTA, September 27 /PRNewswire/ -- Global Payments Inc. (NYSE: GPN) today announced results for its first quarter ended August 31, 2007. For the first quarter, revenue grew 19 percent to US$311.0 million compared to US$260.3 million in the prior year. Excluding the impact of current period restructuring charges, diluted earnings per share grew 6 percent to US$0.54 compared to US$0.51 in the prior year quarter. (Logo: http://www.newscom.com/cgi-bin/prnh/20010221/ATW031LOGO ) In accordance with GAAP, the current quarter includes restructuring charges (see attached reconciliation schedule) relating to an operating center consolidation announced in March 2007. These charges are reflected in our GAAP diluted earnings per share amounts. For the three months ended August 31, 2007, GAAP diluted earnings per share was US$0.53 compared to US$0.51 in the prior year period. During the current quarter, Global Payments completed US$67.9 million in open market repurchases of 1.8 million shares at an average price of US$37.27 per share, including commissions paid. As of August 31, 2007, the company had US$32.1 million remaining under its current share repurchase authorization. Comments and Outlook Chairman, President and CEO, Paul R. Garcia, stated, "We are pleased with our fiscal 2008 first quarter results, which were driven by growth in our merchant services segment. Our revenue growth was primarily driven by continued organic expansion in our domestic ISO channel, as well as the favorable impact from our July 2006 addition of our Asia-Pacific joint venture with HSBC. In addition, our Canadian merchant services channel benefited from a favorable Canadian currency exchange rate. Lastly, our money transfer segment met our expectations for the quarter, and our corporate expenses declined compared to the prior year due to lower equity compensation costs." Comments and Outlook "Based on these results and trends, we are providing annual fiscal 2008 revenue guidance of US$1,195 million to US$1,247 million. This revenue guidance reflects an expected 13 percent to 17 percent growth versus US$1,061.5 million in fiscal 2007. In addition, we are providing annual fiscal 2008 diluted earnings per share guidance of US$1.87 to US$1.96, or 6 percent to 11 percent growth versus US$1.77 in fiscal 2007.(1) This includes the impact of stock option expenses as a result of our June 1, 2006 adoption of FAS 123R. Our guidance excludes the impact of future significant acquisitions, and these earnings per share ranges exclude the impact of potential restructuring and other charges," said Garcia. Conference Call Global Payments will hold a conference call today, September 27, 2007 at 5:00 p.m. ET to discuss financial results and business highlights. The conference call may be accessed by calling +1-877-546-1566 (U.S.) or +1-312-470-7270 (internationally) and using a pass code of "GPN" for both numbers, or via Web cast at www.globalpaymentsinc.com. A replay of the call will be available on the Global Payments Web site through October 11, 2007. Global Payments Inc. (NYSE: GPN) is a leading provider of electronic transaction processing services for consumers, merchants, Independent Sales Organizations (ISOs), financial institutions, government agencies and multi-national corporations located throughout the United States, Canada, Latin America, Europe and the Asia-Pacific. Global Payments offers a comprehensive line of processing solutions for credit and debit cards, business-to-business purchasing cards, gift cards, electronic check conversion and check guarantee, verification and recovery including electronic check services, as well as terminal management. The company also provides consumer money transfer services from the U.S. and Europe to destinations in Latin America, Morocco and the Philippines. For more information about the company and its services, visit www.globalpaymentsinc.com. (1) Fiscal 2007 diluted earnings per share was US$1.75 on a GAAP basis, which includes restructuring and other charges equivalent to US$0.02 in diluted earnings per share. This announcement and comments made by Global Payments' management during the conference call contain certain forward-looking statements within the meaning of the "safe-harbor" provisions of the Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including revenue and earnings estimates and management's expectations regarding future events and developments, are forward looking statements and are subject to significant risks and uncertainties. Among the important factors that may cause actual events or results to differ materially from those anticipated by such forward-looking statements include the following: continued certification by credit card associations, foreign currency risks, competition and pricing, product demand, market and customer acceptance, development difficulties, the effect of economic conditions and consumer spending, security breaches or system failures, costs of capital, changes in immigration patterns, changes in state, federal or foreign laws and regulations affecting the electronic money transfer industry, increases in credit card association fees, utility or system interruptions, the ability to consummate and integrate acquisitions, and other risks detailed in the company's SEC filings, including the most recently filed Form 10-Q or Form 10-K, as applicable. The company undertakes no obligation to revise any of these statements to reflect future circumstances or the occurrence of unanticipated events. Contact: Jane M. Elliott +1-770-829-8234 Voice +1-770-829-8267 Fax investor.relations@globalpay.com (All amounts in US Dollars) UNAUDITED CONSOLIDATED STATEMENTS OF INCOME GLOBAL PAYMENTS INC. AND SUBSIDIARIES (In thousands, except per share data) Three Months Ended August 31, 2007 2006 Revenues $310,980 $260,308 Operating expenses: Cost of service 116,309 98,190 Sales, general and administrative 127,436 98,591 Restructuring 1,003 - 244,748 196,781 Operating income 66,232 63,527 Other income (expense): Interest and other income 5,137 3,596 Interest and other expense (1,873) (2,162) 3,264 1,434 Income before income taxes and minority interest 69,496 64,961 Provision for income taxes (23,783) (20,909) Minority interest, net of tax (2,138) (2,543) Net income $43,575 $41,509 Earnings per share: Basic $0.54 $0.52 Diluted $0.53 $0.51 Weighted average shares outstanding: Basic 80,501 79,734 Diluted 81,907 81,576 CONSOLIDATED CONDENSED BALANCE SHEETS GLOBAL PAYMENTS INC. AND SUBSIDIARIES (In thousands) August 31, May 31, 2007 2007 (Unaudited) Assets Cash and cash equivalents $270,544 $308,872 Accounts receivable, net 88,336 76,168 Claims receivable, net 3,341 2,187 Settlement processing assets 26,510 32,853 Other current assets 35,366 24,349 Current assets 424,097 444,429 Property and equipment, net 122,588 118,495 Goodwill 454,459 451,244 Other intangible assets, net 173,213 175,620 Other assets 11,021 10,841 Total assets $1,185,378 $1,200,629 Liabilities and Shareholders' Equity Lines of credit $133 $- Settlement processing obligations 14,572 20,617 Payable to money transfer beneficiaries 7,944 6,589 Accounts payable and other accrued liabilities 119,421 115,671 Current liabilities 142,070 142,877 Other long-term liabilities 85,079 85,043 Total liabilities 227,149 227,920 Minority interest in equity of subsidiaries 14,612 14,933 Shareholders' equity 943,617 957,776 Total liabilities and shareholders' equity $1,185,378 $1,200,629 UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW GLOBAL PAYMENTS INC. AND SUBSIDIARIES (In thousands) Three Months Ended August 31, 2007 2006 Cash flows from operating activities: Net income $43,575 $41,509 Non-cash items Depreciation and amortization 10,229 9,805 Minority interest in earnings 2,050 2,651 Other, net 7,964 9,554 Changes in working capital, which used cash Settlement processing assets and obligations, net (569) (7,572) Other, net (25,110) (33,587) Net cash provided by operating activities 38,139 22,360 Cash flows from investing activities: Capital expenditures (9,605) (6,929) Business acquisitions (2,625) (67,195) Net cash used in investing activities (12,230) (74,124) Cash flows from financing activities: Net borrowings on lines of credit 133 49 Principal payments under capital leases - (349) Repurchase of common stock (67,873) - Net proceeds under share-based compensation plans and dividends 3,530 5,585 Distributions to minority interests (2,372) (2,530) Net cash (used in) provided by financing activities (66,582) 2,755 Effect of exchange rate changes on cash 2,345 (888) Decrease in cash and cash equivalents (38,328) (49,897) Cash and cash equivalents, beginning of period 308,872 218,475 Cash and cash equivalents, end of period $270,544 $168,578 UNAUDITED CONSOLIDATED STATEMENTS OF INCOME GLOBAL PAYMENTS INC. AND SUBSIDIARIES Reconciliation to Exclude Restructuring Charges from Normalized Results (In thousands, except per share data) Three Months Ended August 31, 2007 2006 Normal- Restructu- GAAP GAAP ized ring(1) Revenues $310,980 $- $310,980 $260,308 Operating expenses: Cost of service 116,309 - 116,309 98,190 Sales, general and administrative 127,436 - 127,436 98,591 Restructuring - 1,003 1,003 - 243,745 1,003 244,748 196,781 Operating income 67,235 (1,003) 66,232 63,527 Other income/(expense): Interest and other income 5,137 - 5,137 3,596 Interest and other expense (1,873) - (1,873) (2,162) 3,264 - 3,264 1,434 Income before income taxes 70,499 (1,003) 69,496 64,961 Provision for income taxes (24,126) 343 (23,783) (20,909) Minority interest, net of tax (2,138) - (2,138) (2,543) Net income $44,235 $(660) $43,575 $41,509 Diluted shares 81,907 - 81,907 81,576 Diluted earnings per share $0.54 $(0.01) $0.53 $0.51 (1) Restructuring charges consist of employee termination benefits relating to a facility closure. Also reflects the related income tax benefit using the company's effective tax rate, which is defined as the provision for income taxes divided by income before income taxes and minority interest. SEGMENT INFORMATION GLOBAL PAYMENTS INC. AND SUBSIDIARIES (In thousands) Three Months Ended August 31, 2007 2006 Revenues Domestic direct $167,868 $135,442 Canada 66,677 60,918 Asia-Pacific 16,064 5,486 Central and Eastern Europe 13,775 13,275 Domestic indirect and other 11,582 12,195 Merchant services 275,966 227,316 Domestic 29,581 29,302 Europe 5,433 3,690 Money transfer 35,014 32,992 Total revenues $310,980 $260,308 Operating income Merchant services $76,106 $72,961 Money transfer 3,722 4,679 Corporate (12,593) (14,113) Restructuring (1,003) - Operating income $66,232 $63,527 Web site: http://www.globalpaymentsinc.com
