Global Payments Reports Second Quarter Earnings



    ATLANTA, Jan. 3 /CNW/ -- Global Payments Inc. (NYSE:   GPN) today announced
results for its second quarter ended November 30, 2007.  For the second
quarter, revenue grew 18 percent to $308.8 million compared to $260.7 million
in the prior year.  Excluding the impact of current period restructuring
charges, diluted earnings per share grew 14 percent to $0.48 compared to $0.42
in the prior year quarter.
    
    (Logo:  http://www.newscom.com/cgi-bin/prnh/20010221/ATW031LOGO )
    
    For the six months ended November 30, 2007, revenue grew 19 percent to
$619.8 million compared to $521.0 million in the prior year period.  Excluding
the impact of current period restructuring charges, diluted earnings per share
grew 11 percent to $1.02 from $0.92 in the prior year period.
    In accordance with GAAP, the current quarter and year-to-date periods
include restructuring charges (see attached reconciliation schedule) relating
to an operating center consolidation announced in March 2007 and completed in
November 2007.  These charges are reflected in our GAAP diluted earnings per
share amounts.  For the three and six months ended November 30, 2007, GAAP
diluted earnings per share were $0.48 and $1.01, respectively, compared to
$0.42 and $0.92, respectively, in the prior year comparable periods.
    During the second quarter, Global Payments repurchased 477,585 shares in
the open market at an average price of $40.09 per share (including commissions
paid) for a total of $19.1 million.  As of November 30, 2007, the company had
$13.0 million remaining under its current share repurchase authorization.
    
    Comments and Outlook
    
    Chairman, President and CEO, Paul R. Garcia, stated, "We are very pleased
with our solid second quarter results, which were driven by growth in our
merchant services segment.  Our strong revenue growth continues to be
primarily due to organic expansion in our domestic ISO channel, as well as the
favorable impact from a strong Canadian currency exchange rate.  I am also
delighted to report that our Asia-Pacific joint venture with HSBC had
favorable revenue growth, which was primarily driven by the benefit of our
sales investments made over this past year."
    "Based on these results and trends, we are providing annual fiscal 2008
revenue guidance of $1,231 million to $1,257 million.  This revenue guidance
reflects an expected 16 percent to 18 percent growth versus $1,061.5 million
in fiscal 2007.  In addition, we are providing annual fiscal 2008 diluted
earnings per share guidance of $1.89 to $1.96, or 7 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, January 3, 2008 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 January 17, 2008.
    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 November 30,
                                                    2007              2006
    

    Revenues                                      $308,776          $260,697

    
    Operating expenses:
         Cost of service                           116,513           105,766
         Sales, general and
          administrative                           133,518           102,628
         Restructuring                                 314                 -
                                                   250,345           208,394
    

    Operating income                                58,431            52,303

    
    Other income (expense):
         Interest and other income                   4,739             3,728
         Interest and other expense                 (1,268)           (1,737)
                                                     3,471             1,991
    

    
    Income before income taxes and
     minority interest                              61,902            54,294
    Provision for income taxes                     (21,023)          (17,692)
    Minority interest, net of tax                   (2,566)           (2,600)
              Net income                           $38,313           $34,002
    

    
    Earnings per share:
              Basic                                  $0.48             $0.42
              Diluted                                $0.48             $0.42
    

    
    Weighted average shares outstanding:
              Basic                                 79,027            80,147
              Diluted                               80,506            81,729
    



    
    UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
    GLOBAL PAYMENTS INC. AND SUBSIDIARIES
    

    (In thousands, except per share data)

    
                                                Six Months Ended November 30,
                                                    2007              2006
    

    Revenues                                      $619,756          $521,005

    
    Operating expenses:
         Cost of service                           232,822           203,956
         Sales, general and
          administrative                           260,954           201,219
         Restructuring                               1,317                 -
                                                   495,093           405,175
    

    Operating income                               124,663           115,830

    
    Other income (expense):
         Interest and other income                   9,876             7,324
         Interest and other expense                 (3,141)           (3,899)
                                                     6,735             3,425
    

    
    Income before income taxes and
     minority interest                             131,398           119,255
    Provision for income taxes                     (44,806)          (38,601)
    Minority interest, net of tax                   (4,704)           (5,143)
              Net income                           $81,888           $75,511
    

    
    Earnings per share:
              Basic                                  $1.03             $0.94
              Diluted                                $1.01             $0.92
    

    
    Weighted average shares outstanding:
              Basic                                 79,767            79,939
              Diluted                               81,209            81,651
    



    
    CONSOLIDATED CONDENSED BALANCE SHEETS
    GLOBAL PAYMENTS INC. AND SUBSIDIARIES
    

    (In thousands)

    
                                                November 30,        May 31,
                                                    2007              2007
                                                (Unaudited)
    Assets
    Cash and cash equivalents                     $363,397          $308,872
    Accounts receivable, net                        83,823            76,168
    Claims receivable, net                           4,002             2,187
    Settlement processing assets                    18,697            32,853
    Other current assets                            40,098            24,349
            Current assets                         510,017           444,429
    

    
    Property and equipment, net                    134,221           118,495
    Goodwill                                       471,923           451,244
    Other intangible assets, net                   175,995           175,620
    Other assets                                    10,593            10,841
                    Total assets                $1,302,749        $1,200,629
    

    
    Liabilities and Shareholders' Equity
    Lines of credit                                   $679              $  -
    Settlement processing obligations               61,726            20,617
    Payable to money transfer
     beneficiaries                                   6,793             6,589
    Accounts payable and other accrued
     liabilities                                   119,926           115,671
            Current liabilities                    189,124           142,877
    

    
    Other long-term liabilities                     94,186            85,043
            Total liabilities                      283,310           227,920
    

    
    Minority interest in equity of
     subsidiaries                                   15,683            14,933
    Shareholders' equity                         1,003,756           957,776
                    Total liabilities and
                     shareholders' equity       $1,302,749        $1,200,629
    



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

    (In thousands)

    
                                                Six Months Ended November 30,
                                                    2007              2006
    

    
    Cash flows from operating activities:
       Net income                                  $81,888           $75,511
       Non-cash items
          Depreciation and amortization             20,978            20,058
          Minority interest in earnings              5,139             5,487
          Other, net                                19,905            15,446
       Changes in working capital, which
        provided (used) cash
          Settlement processing assets
           and obligations, net                     51,818             9,339
          Other, net                               (30,351)          (11,622)
             Net cash provided by
              operating activities                 149,377           114,219
    

    
    Cash flows from investing activities:
       Capital expenditures                        (22,914)          (15,259)
       Business and intangible asset
        acquisitions                               (11,551)          (79,530)
             Net cash used in investing
              activities                           (34,465)          (94,789)
    

    
    Cash flows from financing activities:
       Net borrowings on lines of credit               679                 -
       Principal payments under capital
        leases                                           -              (544)
       Repurchase of common stock                  (87,020)                -
       Net proceeds under share-based
        compensation plans and dividends            17,097            14,020
       Distributions to minority
        interests                                   (4,876)           (4,707)
             Net cash (used in) provided
              by financing activities              (74,120)            8,769
    

    
    Effect of exchange rate changes on
     cash                                           13,733             2,573
    

    
    Increase in cash and cash equivalents           54,525            30,772
    Cash and cash equivalents, beginning
     of period                                     308,872           218,475
    Cash and cash equivalents, end of
     period                                       $363,397          $249,247
    



    
    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 November 30,              2007                  2006
                                Normalized  Restructuring(1)  GAAP     GAAP
    

    Revenues                      $308,776        $-       $308,776  $260,697

    
    Operating expenses:
       Cost of service             116,513         -        116,513   105,766
       Sales, general and
        administrative             133,518         -        133,518   102,628
       Restructuring                     -       314            314         -
                                   250,031       314        250,345   208,394
    

    Operating income                58,745      (314)        58,431    52,303

    
    Other income/(expense):
       Interest and other income     4,739         -          4,739     3,728
       Interest and other expense   (1,268)        -         (1,268)   (1,737)
                                     3,471         -          3,471     1,991
    

    
    Income before income taxes      62,216      (314)        61,902    54,294
    Provision for income taxes     (21,129)      106        (21,023)  (17,692)
    Minority interest, net of tax   (2,566)        -         (2,566)   (2,600)
      Net income                   $38,521     $(208)       $38,313   $34,002
    

    
    Diluted shares                  80,506         -         80,506    81,729
    Diluted earnings per share       $0.48        $-          $0.48     $0.42
    


    
    (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.
    



    
    UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
    GLOBAL PAYMENTS INC. AND SUBSIDIARIES
    

    Reconciliation to Exclude Restructuring Charges from Normalized Results

    (In thousands, except per share data)

    
    Six Months Ended November 30,                2007                  2006
                                Normalized  Restructuring(1)  GAAP     GAAP
    

    Revenues                      $619,756        $-       $619,756  $521,005

    
    Operating expenses:
       Cost of service             232,822         -        232,822   203,956
       Sales, general and
        administrative             260,954         -        260,954   201,219
       Restructuring                     -     1,317          1,317       -
                                   493,776     1,317        495,093   405,175
    

    Operating income               125,980    (1,317)       124,663   115,830

    
    Other income/(expense):
       Interest and other income     9,876         -          9,876     7,324
       Interest and other expense   (3,141)        -         (3,141)   (3,899)
                                     6,735         -          6,735     3,425
    

    
    Income before income taxes     132,715    (1,317)       131,398   119,255
    Provision for income taxes     (45,255)      449        (44,806)  (38,601)
    Minority interest, net of tax   (4,704)        -         (4,704)   (5,143)
      Net income                   $82,756     $(868)       $81,888   $75,511
    

    
    Diluted shares                  81,209         -         81,209    81,651
    Diluted earnings per share       $1.02    $(0.01)         $1.01     $0.92
    


    
    (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 November 30,
                                                     2007              2006
      Revenues
      Domestic direct                              $165,469          $132,522
      Canada                                         65,772            54,766
      Asia-Pacific                                   18,426            14,849
      Central and Eastern Europe                     14,135            13,248
      Domestic indirect and other                    10,646            11,419
        Merchant services                           274,448           226,804
    

    
      Domestic                                       28,415            29,888
      Europe                                          5,913             4,005
        Money transfer                               34,328            33,893
          Total revenues                           $308,776          $260,697
    

    
      Operating income
      Merchant services                             $71,092           $61,281
      Money transfer                                  1,239             4,067
      Corporate                                     (13,586)          (13,045)
      Restructuring                                    (314)                -
        Operating income                            $58,431           $52,303
    



    
    SEGMENT INFORMATION
    GLOBAL PAYMENTS INC. AND SUBSIDIARIES
    

    (In thousands)

    
                                                Six Months Ended November 30,
                                                     2007              2006
    

    
      Revenues
      Domestic direct                              $333,337          $267,964
      Canada                                        132,449           115,684
      Asia-Pacific                                   34,490            20,335
      Central and Eastern Europe                     27,910            26,523
      Domestic indirect and other                    22,228            23,614
        Merchant services                           550,414           454,120
    

    
      Domestic                                       57,996            59,190
      Europe                                         11,346             7,695
        Money transfer                               69,342            66,885
          Total revenues                           $619,756          $521,005
    

    
      Operating income
      Merchant services                            $147,198          $134,242
      Money transfer                                  4,961             8,746
      Corporate                                     (26,179)          (27,158)
      Restructuring                                  (1,317)                -
        Operating income                           $124,663          $115,830
    




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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