Global Payments Reports First Quarter Earnings



    ATLANTA, Sept. 27 /CNW/ -- 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 $311.0 million compared to $260.3 million
in the prior year.  Excluding the impact of current period restructuring
charges, diluted earnings per share grew 6 percent to $0.54 compared to $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 $0.53 compared to $0.51 in the
prior year period.
    During the current quarter, Global Payments completed $67.9 million in
open market repurchases of 1.8 million shares at an average price of $37.27
per share, including commissions paid.  As of August 31, 2007, the company had
$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 $1,195 million to $1,247 million.  This revenue guidance
reflects an expected 13 percent to 17 percent growth versus $1,061.5 million
in fiscal 2007.  In addition, we are providing annual fiscal 2008 diluted
earnings per share guidance of $1.87 to $1.96, or 6 percent to 11 percent
growth versus $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 $1.75 on a GAAP basis,
         which includes restructuring and other charges equivalent to $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
              770-829-8234 Voice
              770-829-8267 Fax
              investor.relations@globalpay.com
    



    
    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
    




For further information:

For further information: Jane M. Elliott of Global Payments Inc., 
+1-770-829-8234, or fax, +1-770-829-8267, investor.relations@globalpay.com Web
Site: http://www.globalpaymentsinc.com/

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