Global Payments Reports Fourth Quarter and Fiscal 2008 Earnings



    ATLANTA, July 24 /CNW/ -- Global Payments Inc. (NYSE:   GPN) today
announced results for its fourth quarter and fiscal year ended May 31, 2008. 
For the fourth quarter, revenues grew 23 percent to $343.8 million compared to
$280.1 million in the prior year.  Excluding the unfavorable impact of a
non-recurring, non-cash foreign currency item and prior period restructuring
and other charges, diluted earnings per share grew 21 percent to $0.52
compared to $0.43 in the prior year quarter.
    
    (Logo:  http://www.newscom.com/cgi-bin/prnh/20010221/ATW031LOGO )
    
    For the fiscal year ended May 31, 2008, revenues grew 20 percent to
$1,274.2 million compared to $1,061.5 million in the prior year.  Excluding
the favorable impact of a non-recurring, non-cash operating tax item, the
unfavorable impact of a non-recurring, non-cash foreign currency item, and
prior period restructuring and other charges, diluted earnings per share grew
12 percent to $1.98 from $1.77 in the prior year.
    In accordance with GAAP, the current and prior fiscal year periods
include restructuring and other charges, and the current fiscal year period
includes the operating tax item and foreign currency item described above. 
These items are reflected in our GAAP diluted earnings per share amounts (see
attached reconciliation schedule).  For the three months and year ended May
31, 2008, GAAP diluted earnings per share were $0.50 and $2.01, respectively,
compared to $0.40 and $1.75, respectively, in the prior year comparable
periods.
    
    Comments and Outlook
    
    Chairman, President and CEO, Paul R. Garcia, stated, "Our merchant
services segment delivered solid financial results for the fourth quarter and
fiscal year 2008.  We continue to successfully pursue our ongoing strategy of
expanding our existing sales channels, increasing our international presence,
and investing in our technology and people.  We are also delighted to be
joining forces once more with HSBC Bank plc in a merchant services joint
venture in the U.K.  Lastly, our money transfer segment rebounded to strong
growth in the fourth quarter, as expected."
    "For our fiscal 2009, we are providing annual revenue guidance of $1,620
million to $1,675 million.  This revenue guidance reflects an expected 27
percent to 31 percent growth versus $1,274.2 million in fiscal 2008.  In
addition, we are providing annual diluted earnings per share guidance of $2.20
to $2.30, or 11 percent to 16 percent growth versus $1.98 in fiscal 2008(1).
Our fiscal 2009 guidance excludes the impact of future significant
acquisitions and restructuring and other charges," said Garcia.
    
    Conference Call
    
    Global Payments will hold a conference call today, July 24, 2008 at 5:00
p.m. ET to discuss financial results and business highlights.  The conference
call may be accessed by calling 1-888-221-9554 (U.S. and Canada) or
1-913-312-0963 (outside U.S. and Canada) and using a pass code of "GPN" for
both numbers, or via Web cast at http://www.globalpaymentsinc.com .  A replay
of the call will be available on the Global Payments Web site through August
7, 2008.
    (1) Fiscal 2008 diluted earnings per share was $2.01 on a GAAP basis,
which includes restructuring and other charges, a favorable operating tax
item, and an unfavorable foreign currency item (see attached reconciliation
schedule).
    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, the United Kingdom and the Asia-Pacific region.  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
http://www.globalpaymentsinc.com .
    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.  Important factors that may cause actual
events or results to differ materially from those anticipated by such
forward-looking statements include the following: foreign currency risks which
become increasingly relevant as we expand internationally, development
difficulties, the effect of economic conditions and consumer spending, costs
of capital, 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 May 31,
                                                    2008              2007
    

    
    Revenues                                      $343,832          $280,100
    

    
    Operating expenses:
        Cost of service                            125,129           107,326
        Sales, general and administrative          151,918           118,620
        Restructuring and other                          -             3,088
                                                   277,047           229,034
    

    
    Operating income                                66,785            51,066
    

    
    Other income (expense):
        Interest and other income                    3,567             4,654
        Interest and other expense                  (2,827)           (2,166)
                                                       740             2,488
    


    
    Income before income taxes and
     minority interest                              67,525            53,554
    Provision for income taxes                     (26,517)          (17,687)
    Minority interest, net of tax benefit
     (provision) of $770 and $(1,139),
     respectively                                     (197)           (2,689)
              Net income                           $40,811           $33,178
    

    
    Earnings per share:
              Basic                                  $0.51             $0.41
              Diluted                                $0.50             $0.40
    

    
    Weighted average shares outstanding:
              Basic                                 79,316            80,617
              Diluted                               80,846            82,015
    



    
    UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
    GLOBAL PAYMENTS INC. AND SUBSIDIARIES
    


    
    (In thousands, except per share data)
    

    
                                                      Year Ended May 31,
                                                    2008              2007
    

    
    Revenues                                    $1,274,229        $1,061,523
    

    
    Operating expenses:
        Cost of service                            475,612           414,837
        Sales, general and administrative          545,941           425,509
        Restructuring and other                      1,317             3,088
                                                 1,022,870           843,434
    

    
    Operating income                               251,359           218,089
    

    
    Other income (expense):
        Interest and other income                   18,210            16,706
        Interest and other expense                  (8,166)           (8,464)
                                                    10,044             8,242
    


    
    Income before income taxes and
     minority interest                             261,403           226,331
    Provision for income taxes                     (90,588)          (73,436)
    Minority interest, net of tax benefit
     (provision) of $700 and $(696),
     respectively                                   (8,061)           (9,910)
              Net income                          $162,754          $142,985
    

    
    Earnings per share:
              Basic                                  $2.05             $1.78
              Diluted                                $2.01             $1.75
    

    
    Weighted average shares outstanding:
              Basic                                 79,518            80,229
              Diluted                               80,979            81,822
    



    
    CONSOLIDATED CONDENSED BALANCE SHEETS
    GLOBAL PAYMENTS INC. AND SUBSIDIARIES
    


    
    (In thousands)
    

    
                                                   May 31,           May 31,
                                                    2008              2007
                                                (Unaudited)
    Assets
    Cash and cash equivalents                     $456,060          $308,872
    Accounts receivable, net                       100,179            76,168
    Claims receivable, net                           1,354             2,187
    Settlement processing assets                    24,280            32,853
    Other current assets                            35,537            24,349
              Current assets                       617,410           444,429
    

    
    Property and equipment, net                    141,415           118,495
    Goodwill                                       497,136           451,244
    Other intangible assets, net                   175,636           175,620
    Other assets                                    14,310            10,841
                        Total assets            $1,445,907        $1,200,629
    

    
    Liabilities and Shareholders' Equity
    Lines of credit                                 $1,527              $-
    Settlement processing obligations               56,731            20,617
    Payable to money transfer beneficiaries          9,276             6,589
    Accounts payable and other accrued
     liabilities                                   150,218           115,671
              Current liabilities                  217,752           142,877
    

    
    Other long-term liabilities                     86,613            85,043
                        Total liabilities          304,365           227,920
    

    
    Minority interest in equity of subsidiaries     14,724            14,933
    Shareholders' equity                         1,126,818           957,776
                        Total liabilities and
                         shareholders' equity   $1,445,907        $1,200,629
    



    
    UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW
    GLOBAL PAYMENTS INC. AND SUBSIDIARIES
    


    
    (In thousands)
    

    
                                                       Year Ended May 31,
                                                    2008              2007
    

    
    Cash flows from operating activities:
        Net income                                $162,754          $142,985
        Non-cash items
            Restructuring and other charges            -               1,145
            Depreciation and amortization           44,034            40,365
            Minority interest in earnings            8,762             9,214
            Other, net                              38,558            36,227
        Changes in working capital, which
         provided (used) cash
            Settlement processing assets and
             obligations, net                       38,311           (13,937)
            Other, net                             (20,005)          (24,867)
                Net cash provided by operating
                 activities                        272,414           191,132
    

    
    Cash flows from investing activities:
        Capital expenditures                       (44,974)          (35,374)
        Business and intangible asset acquisitions (18,247)          (81,261)
            Net cash used in investing activities  (63,221)         (116,635)
    

    
    Cash flows from financing activities:
        Net borrowings on lines of credit            1,527               -
        Principal payments under capital leases        -                (746)
        Repurchase of common stock                 (87,020)              -
        Net proceeds under share-based
         compensation plans and dividends           18,579            20,385
        Distributions to minority interests, net    (9,459)           (8,753)
            Net cash (used in) provided by
             financing activities                  (76,373)           10,886
    

    
    Effect of exchange rate changes on cash         14,368             5,014
    

    
    Increase in cash and cash equivalents          147,188            90,397
    Cash and cash equivalents, beginning of period 308,872           218,475
    Cash and cash equivalents, end of period      $456,060          $308,872
    



    
    UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
    GLOBAL PAYMENTS INC. AND SUBSIDIARIES
    

    
    Reconciliation to Exclude Restructuring and Other Items from Normalized
    Results
    

    
    (In thousands, except per share data)
    

    
    Three Months Ended May 31,                          2008
                                          Normalized   Other(1)     GAAP
    

    
    Revenues                                $343,832       $-      $343,832
    

    
    Operating expenses:
       Cost of service                       125,129        -       125,129
       Sales, general and administrative     151,918        -       151,918
       Restructuring and other                   -          -           -
                                             277,047        -       277,047
    

    
    Operating income                          66,785        -        66,785
    

    
    Other income/(expense):
       Interest and other income               3,567        -         3,567
       Interest and other expense             (1,157)    (1,670)     (2,827)
                                               2,410     (1,670)        740
    

    
    Income before income taxes                69,195     (1,670)     67,525
    Provision for income taxes               (26,868)       351     (26,517)
    Minority interest, net of tax benefit
     (provision) of $770 and $(1,139),
     respectively                               (197)       -          (197)
              Net income                     $42,130    $(1,319)    $40,811
    

    
    Diluted shares                            80,846        -        80,846
    Diluted earnings per share                 $0.52     $(0.02)      $0.50
    




    
    UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
    GLOBAL PAYMENTS INC. AND SUBSIDIARIES
    

    
    Reconciliation to Exclude Restructuring and Other Items from Normalized
    Results
    

    
    (In thousands, except per share data)
    


    
    Three Months Ended May 31,                           2007
                                                      Restructur-
                                                        ing and
                                          Normalized    Other(2)     GAAP
    

    
    Revenues                                $280,100       $-      $280,100
    

    
    Operating expenses:
       Cost of service                       107,326        -       107,326
       Sales, general and administrative     118,620        -       118,620
       Restructuring and other                   -        3,088       3,088
                                             225,946      3,088     229,034
    

    
    Operating income                          54,154     (3,088)     51,066
    

    
    Other income/(expense):
       Interest and other income               4,654        -         4,654
       Interest and other expense             (2,166)       -        (2,166)
                                               2,488        -         2,488
    

    
    Income before income taxes                56,642     (3,088)     53,554
    Provision for income taxes               (18,689)     1,002     (17,687)
    Minority interest, net of tax benefit
     (provision) of $770 and $(1,139),
     respectively                             (2,689)       -        (2,689)
              Net income                     $35,264    $(2,086)    $33,178
    

    
    Diluted shares                            82,015        -        82,015
    Diluted earnings per share                 $0.43     $(0.03)      $0.40
    


    
     (1) Reflects the impact of a non-recurring, non-cash, foreign currency
     accounting loss relating to one of our United States dollar cash accounts
     held by a foreign subsidiary whose functional currency is their local
     currency.  No economic loss occurred relating to this item.  Also
     reflects the related income tax benefit.
    

    
     (2) Restructuring and other charges consist of employee termination
     benefits, facility closure costs, and fixed asset abandonment relating to
     various restructuring initiatives.  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.
    



    
    UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
    GLOBAL PAYMENTS INC. AND SUBSIDIARIES
    

    
    Reconciliation to Exclude Restructuring and Other Items from Normalized
    Results
    

    
    (In thousands, except per share data)
    

    
    Year Ended May 31,                                  2008
                                                  Restruct-
                                       Normalized  uring(1) Other(2)   GAAP
    

    
    Revenues                           $1,274,229    $-      $-    $1,274,229
    

    
    Operating expenses:
       Cost of service                    475,612     -       -       475,612
       Sales, general and admin.          552,989     -    (7,048)    545,941
       Restructuring and other                -     1,317     -         1,317
                                        1,028,601   1,317  (7,048)  1,022,870
    

    
    Operating income                      245,628  (1,317)  7,048     251,359
    

    
    Other income/(expense):
       Interest and other income           18,210     -       -        18,210
       Interest and other expense          (6,496)    -    (1,670)     (8,166)
                                           11,714     -    (1,670)     10,044
    

    
    Income before income taxes            257,342  (1,317)  5,378     261,403
    Provision for income taxes            (89,059)    449  (1,978)    (90,588)
    Minority interest, net of tax
     benefit (provision) of $700
     and $(696), respectively              (8,061)    -       -        (8,061)
              Net income                 $160,222   $(868) $3,400    $162,754
    

    
    Diluted shares                         80,979     -       -        80,979
    Diluted earnings per share(3)           $1.98  $(0.01)  $0.04       $2.01
    



    
    UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
    GLOBAL PAYMENTS INC. AND SUBSIDIARIES
    

    
    Reconciliation to Exclude Restructuring and Other Items from Normalized
    Results
    

    
    (In thousands, except per share data)
    

    
    Year Ended May 31,                                   2007
                                                      Restructur-
                                                       ing and
                                          Normalized   Other(1)      GAAP
    

    
    Revenues                               $1,061,523      $-     $1,061,523
    

    
    Operating expenses:
       Cost of service                        414,837       -        414,837
       Sales, general and admin.              425,509       -        425,509
       Restructuring and other                    -       3,088        3,088
                                              840,346     3,088      843,434
    

    
    Operating income                          221,177    (3,088)     218,089
    

    
    Other income/(expense):
       Interest and other income               16,706       -         16,706
       Interest and other expense              (8,464)      -         (8,464)
                                                8,242       -          8,242
    

    
    Income before income taxes                229,419    (3,088)     226,331
    Provision for income taxes                (74,438)    1,002      (73,436)
    Minority interest, net of tax benefit
     (provision) of $700 and $(696),
     respectively                              (9,910)      -         (9,910)
              Net income                     $145,071   $(2,086)    $142,985
    

    
    Diluted shares                             81,822       -         81,822
    Diluted earnings per share (3)              $1.77    $(0.03)       $1.75
    


    
     (1) Restructuring charges in the current period 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.  Restructuring and other charges in
     the prior period consist of employee termination benefits, facility
     closure costs, and fixed asset abandonment relating to various
     restructuring initiatives.  Also reflects the related income tax benefit
     using the company's effective tax rate, as described above.
    


    
     (2) Reflects the favorable impact of a non-recurring, non-cash operating
     tax item included in sales, general and administrative expenses.  We
     define operating taxes as those that are unrelated to income taxes, such
     as sales and property taxes.  During the nine months ended February 29,
     2008, we determined that a contingent liability relating to an operating
     tax item was no longer deemed probable.  As such, we released the related
     liability.  Also reflects the related income tax benefit of this
     operating tax item 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.  Also includes the impact of a non-
     recurring, non-cash, foreign currency accounting loss relating to one of
     our United States dollar cash accounts held by a foreign subsidiary whose
     functional currency is their local currency.  No economic loss occurred
     relating to this item, which is reflected above in interest and other
     expense.  Also reflects the related income tax benefit of this foreign
     currency item.
    

    
     (3) Amounts do not add across the columns due to rounding for the year
     ended May 31, 2007.
    



    
    SEGMENT INFORMATION
    GLOBAL PAYMENTS INC. AND SUBSIDIARIES
    

    
    (In thousands)
                                                   Three Months Ended May 31,
                                                     2008              2007
      Revenues
      Domestic direct                              $182,356          $154,166
      Canada                                         73,544            54,256
      Asia-Pacific                                   18,900            13,377
      Central and Eastern Europe                     17,413            12,457
      Domestic indirect and other                    11,256            11,695
        Merchant services                           303,469           245,951
    

    
      Domestic                                       33,016            29,323
      Europe                                          7,347             4,826
        Money transfer                               40,363            34,149
          Total revenues                           $343,832          $280,100
    

    
      Operating income
      Merchant services                             $73,714           $63,395
      Money transfer                                  7,518             3,481
      Corporate                                     (14,447)          (12,722)
      Restructuring and other                           -              (3,088)
        Operating income                            $66,785           $51,066
    



    
    SEGMENT INFORMATION
    GLOBAL PAYMENTS INC. AND SUBSIDIARIES
    

    
    (In thousands)
                                                      Year Ended May 31,
                                                     2008             2007
      Revenues
      Domestic direct                              $687,065         $558,026
      Canada                                        267,249          224,570
      Asia-Pacific                                   72,367           48,449
      Central and Eastern Europe                     59,778           51,224
      Domestic indirect and other                    44,150           46,873
        Merchant services                         1,130,609          929,142
    

    
      Domestic                                      119,019          115,416
      Europe                                         24,601           16,965
        Money transfer                              143,620          132,381
          Total revenues                         $1,274,229       $1,061,523
    

    
      Operating income
      Merchant services(1)                         $293,030         $259,670
      Money transfer                                 13,635           14,476
      Corporate                                     (53,989)         (52,969)
      Restructuring and other                        (1,317)          (3,088)
        Operating income                           $251,359         $218,089
    

    
     (1) Includes the favorable impact of a non-recurring, non-cash operating
     tax item of $7.0 million in the year ended May 31, 2008.

    




For further information:

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

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