Global Payments Reports Third Quarter Earnings



    ATLANTA, March 27 /CNW/ -- Global Payments Inc. (NYSE:   GPN) today
announced results for its third quarter ended February 29, 2008.  For the
third quarter, revenue grew 19 percent to $310.6 million compared to $260.4
million in the prior year.  Excluding the favorable impact of a non-recurring,
non-cash operating tax item (included in sales, general and administrative
expenses), diluted earnings per share grew 5 percent to $0.44 compared to
$0.42 in the prior year quarter.
    
    (Logo:  http://www.newscom.com/cgi-bin/prnh/20010221/ATW031LOGO)
    
    For the nine months ended February 29, 2008, revenue grew 19 percent to
$930.4 million compared to $781.4 million in the prior year period.  Excluding
the impact of current period restructuring charges and the operating tax item
described above, diluted earnings per share grew 9 percent to $1.46 from $1.34
in the prior year period.
    In accordance with GAAP, the current quarter and year-to-date periods
include restructuring charges and the operating tax item described above (see
attached reconciliation schedule).  These items are reflected in our GAAP
diluted earnings per share amounts.  For the three and nine months ended
February 29, 2008, GAAP diluted earnings per share were $0.50 and $1.51,
respectively, compared to $0.42 and $1.34, respectively, in the prior year
comparable periods.
    
    Comments and Outlook
    
    Chairman, President and CEO, Paul R. Garcia, stated, "We delivered solid
financial results for our fiscal third quarter, largely driven by our merchant
services segment.  Our domestic ISO channel continues to favorably impact our
financial results through organic expansion.  Our growth also continues to
benefit from favorable currency exchange rates in both Canada and the Czech
Republic.  I am also very pleased with the strong revenue growth from our
Asia-Pacific joint venture with HSBC."
    "Based on these results and trends, we are providing annual fiscal 2008
revenue guidance of $1,250 million to $1,260 million.  This revenue guidance
reflects an expected 18 percent to 19 percent growth versus $1,061.5 million
in fiscal 2007.  In addition, we are providing annual fiscal 2008 diluted
earnings per share guidance of $1.95 to $1.97, or 10 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 the operating tax item
described above, in addition to restructuring and other charges," said Garcia.
    
    Conference Call
    
    Global Payments will hold a conference call today, March 27, 2008 at 5:00
p.m. ET to discuss financial results and business highlights.  The conference
call may be accessed by calling 1-888-599-4884 (U.S. and Canada) or
1-913-312-0961 (outside U.S. and Canada) 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 April 10, 2008.
    (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.
    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 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 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: 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 February 29/28,
                                                    2008              2007
    

    Revenues                                      $310,641          $260,418

    
    Operating expenses:
         Cost of service                           117,661           103,555
         Sales, general and administrative         133,069           105,670
                                                   250,730           209,225
    

    Operating income                                59,911            51,193

    
    Other income (expense):
         Interest and other income                   4,767             4,728
         Interest and other expense                 (2,198)           (2,399)
                                                     2,569             2,329
    


    
    Income before income taxes and
     minority interest                              62,480            53,522
    Provision for income taxes                     (19,265)          (17,148)
    Minority interest, net of tax                   (3,160)           (2,078)
              Net income                           $40,055           $34,296
    

    
    Earnings per share:
              Basic                                  $0.51             $0.43
              Diluted                                $0.50             $0.42
    

    
    Weighted average shares outstanding:
              Basic                                 79,219            80,421
              Diluted                               80,650            81,972
    



    
    UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
    GLOBAL PAYMENTS INC. AND SUBSIDIARIES
    

    (In thousands, except per share data)

    
                                             Nine Months Ended February 29/28,
                                                    2008              2007
    

    Revenues                                      $930,397          $781,423

    
    Operating expenses:
         Cost of service                           350,483           307,511
         Sales, general and administrative         394,023           306,889
         Restructuring                               1,317                 -
                                                   745,823           614,400
    

    Operating income                               184,574           167,023

    
    Other income (expense):
         Interest and other income                  14,643            12,052
         Interest and other expense                 (5,339)           (6,298)
                                                     9,304             5,754
    

    
    Income before income taxes and
     minority interest                             193,878           172,777
    Provision for income taxes                     (64,071)          (55,749)
    Minority interest, net of tax                   (7,864)           (7,221)
              Net income                          $121,943          $109,807
    

    
    Earnings per share:
              Basic                                  $1.53             $1.37
              Diluted                                $1.51             $1.34
    

    
    Weighted average shares outstanding:
              Basic                                 79,584            80,098
              Diluted                               81,023            81,756
    



    
    CONSOLIDATED CONDENSED BALANCE SHEETS
    GLOBAL PAYMENTS INC. AND SUBSIDIARIES
    

    (In thousands)

    
                                                February 29,         May 31,
                                                    2008              2007
                                                (Unaudited)
    Assets
    Cash and cash equivalents                     $388,467          $308,872
    Accounts receivable, net                        83,209            76,168
    Claims receivable, net                           2,296             2,187
    Settlement processing assets                    15,647            32,853
    Other current assets                            39,153            24,349
            Current assets                         528,772           444,429
    

    
    Property and equipment, net                    134,695           118,495
    Goodwill                                       472,543           451,244
    Other intangible assets, net                   176,555           175,620
    Other assets                                    13,204            10,841
                    Total assets                $1,325,769        $1,200,629
    

    
    Liabilities and Shareholders' Equity
    Lines of credit                                 $1,126              $-
    Settlement processing obligations               33,643            20,617
    Payable to money transfer beneficiaries          7,594             6,589
    Accounts payable and other accrued
     liabilities                                   126,695           115,671
            Current liabilities                    169,058           142,877
    

    
    Other long-term liabilities                     82,431            85,043
            Total liabilities                      251,489           227,920
    

    
    Minority interest in equity of
     subsidiaries                                   16,129            14,933
    Shareholders' equity                         1,058,151           957,776
                    Total liabilities and
                     shareholders' equity       $1,325,769        $1,200,629
    



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

    (In thousands)

    
                                             Nine Months Ended February 29/28,
                                                     2008              2007
    

    
    Cash flows from operating activities:
       Net income                                 $121,943          $109,807
       Non-cash items
          Depreciation and amortization             32,220            30,344
          Minority interest in earnings              7,794             7,664
          Other, net                                22,217            18,586
       Changes in working capital, which
        provided (used) cash
          Settlement processing assets
           and obligations, net                     26,297            21,608
          Other, net                               (26,561)          (24,081)
             Net cash provided by
              operating activities                 183,910           163,928
    

    
    Cash flows from investing activities:
       Capital expenditures                        (31,926)          (23,234)
       Business and intangible asset
        acquisitions                               (12,051)          (80,230)
             Net cash used in investing
              activities                           (43,977)         (103,464)
    

    
    Cash flows from financing activities:
       Net borrowings on lines of credit             1,126               -
       Principal payments under capital leases         -                (746)
       Repurchase of common stock                  (87,020)              -
       Net proceeds under share-based
        compensation plans and dividends            17,829            17,263
       Distributions to minority
        interests, net                              (7,085)           (6,751)
             Net cash (used in) provided
              by financing activities              (75,150)            9,766
    

    Effect of exchange rate changes on cash         14,812             3,354

    
    Increase in cash and cash equivalents           79,595            73,584
    Cash and cash equivalents, beginning
     of period                                     308,872           218,475
    Cash and cash equivalents, end of period      $388,467          $292,059
    



    
    UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
    GLOBAL PAYMENTS INC. AND SUBSIDIARIES
    

    Reconciliation to Exclude an Operating Tax Item from Normalized Results

    (In thousands, except per share data)

    
    Three Months Ended February 29/28,              2008               2007
                                                   Opera-
                                                    ting
                                                    Tax
                                       Normalized  Item(1)   GAAP      GAAP
    


    Revenues                             $310,641    $-    $310,641  $260,418

    
    Operating expenses:
       Cost of service                    117,661     -     117,661   103,555
       Sales, general and administrative  140,117  (7,048)  133,069   105,670
                                          257,778  (7,048)  250,730   209,225
    

    Operating income                       52,863   7,048    59,911    51,193

    
    Other income/(expense):
       Interest and other income            4,767     -       4,767     4,728
       Interest and other expense          (2,198)    -      (2,198)   (2,399)
                                            2,569     -       2,569     2,329
    

    
    Income before income taxes             55,432   7,048    62,480    53,522
    Provision for income taxes            (16,936) (2,329)  (19,265)  (17,148)
    Minority interest, net of tax          (3,160)    -      (3,160)   (2,078)
      Net income                          $35,336  $4,719   $40,055   $34,296
    

    
     Diluted shares                        80,650     -      80,650    81,972
     Diluted earnings per share             $0.44   $0.06     $0.50     $0.42
    

    
    (1) Relates to 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 three 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 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 and an Operating Tax Item
    from Normalized Results
    

    (In thousands, except per share data)

    
    Nine Months Ended February 29/28,
                                               2008                    2007
                                                    Opera-
                                                     ting
                                         Restruc-    Tax
                             Normalized  turing(1)  Item(2)  GAAP      GAAP
    

    Revenues                   $930,397      $-      $-    $930,397  $781,423

    
    Operating expenses:
       Cost of service          350,483       -       -     350,483   307,511
       Sales, general and
        administrative          401,071       -    (7,048)  394,023   306,889
       Restructuring                -       1,317     -       1,317       -
                                751,554     1,317  (7,048)  745,823   614,400
    

    Operating income            178,843    (1,317)  7,048   184,574   167,023

    
    Other income/(expense):
       Interest and other
        income                   14,643       -       -      14,643    12,052
       Interest and other
        expense                  (5,339)      -       -      (5,339)   (6,298)
                                  9,304       -       -       9,304     5,754
    

    
    Income before income taxes  188,147    (1,317)  7,048   193,878   172,777
    Provision for income taxes  (62,191)      449  (2,329)  (64,071)  (55,749)
    Minority interest, net of
     tax                         (7,864)      -       -      (7,864)   (7,221)
    Net income                 $118,092     $(868) $4,719  $121,943  $109,807
    

    
     Diluted shares              81,023       -       -      81,023    81,756
     Diluted earnings
      per share                   $1.46    $(0.01)  $0.06     $1.51     $1.34
    

    
    (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.
    

    
    (2) Relates to 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 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 February 29/28,
                                                     2008              2007
    

    
      Revenues
      Domestic direct                              $171,372          $135,896
      Canada                                         61,256            54,630
      Asia-Pacific                                   18,977            14,737
      Central and Eastern Europe                     14,455            12,244
      Domestic indirect and other                    10,666            11,564
        Merchant services                           276,726           229,071
    

    
      Domestic                                       28,007            26,903
      Europe                                          5,908             4,444
        Money transfer                               33,915            31,347
          Total revenues                           $310,641          $260,418
    

    
      Operating income
      Merchant services(1)                          $72,118           $62,033
      Money transfer                                  1,156             2,249
      Corporate                                     (13,363)          (13,089)
        Operating income                            $59,911           $51,193
    

    
    (1) Includes the favorable impact of a non-recurring, non-cash operating
        tax item of $7.0 million in the three months ended February 29, 2008.
    



    
    SEGMENT INFORMATION
    GLOBAL PAYMENTS INC. AND SUBSIDIARIES
    

    (In thousands)

    
                                             Nine Months Ended February 29/28,
                                                     2008              2007
    

    
      Revenues
      Domestic direct                              $504,709          $403,860
      Canada                                        193,705           170,314
      Asia-Pacific                                   53,467            35,072
      Central and Eastern Europe                     42,365            38,767
      Domestic indirect and other                    32,894            35,178
        Merchant services                           827,140           683,191
    

    
      Domestic                                       86,003            86,093
      Europe                                         17,254            12,139
        Money transfer                              103,257            98,232
          Total revenues                           $930,397          $781,423
    

    
      Operating income
      Merchant services(1)                         $219,316          $196,275
      Money transfer                                  6,117            10,995
      Corporate                                     (39,542)          (40,247)
      Restructuring                                  (1,317)              -
        Operating income                           $184,574          $167,023
    

    
    (1) Includes the favorable impact of a non-recurring, non-cash operating
        tax item of $7.0 million in the nine months ended February 29, 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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