Global Payments Reports First Quarter Earnings
(Logo: http://www.newscom.com/cgi-bin/prnh/20010221/ATW031LOGO )
Chairman and CEO, Paul R. Garcia, stated, "Despite difficult macroeconomic conditions and unfavorable foreign currency trends affecting our year over year growth, we reported solid financial results driven by robust performance in our U.S. ISO channel, acquisition benefits from the U.K. and United Card Service and strong performance in our International businesses.
"Based on our current outlook, we continue to expect fiscal 2010 annual revenue of
Conference Call
Global Payments will hold a conference call today,
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
This announcement and comments made by Global Payments' management during the conference call may 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, the effect of current U.S. economic conditions, including a decline in the value of the U.S. dollar, the impact of future performance and integration of recent acquisitions, the continued erosion of the value of our money transfer business 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.
SCHEDULE 1
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands, except per share data)
Three Months Ended August 31,
2009 2008
Revenues
Operating expenses:
Cost of service 162,828 144,177
Sales, general and administrative 185,836 168,483
348,664 312,660
Operating income 92,646 93,097
Other income (expense):
Interest and other income 731 3,371
Interest and other expense (4,171) (2,404)
(3,440) 967
Income before income taxes 89,206 94,064
Provision for income taxes, net (26,762) (28,216)
Net income including noncontrolling
Interests 62,444 65,848
Less: Net income attributable to
noncontrolling interests, net of tax
provision (benefit) of $332 and $(35),
respectively (4,613) (8,321)
Net income attributable to
Global Payments $ 57,831 $ 57,527
Earnings per share:
Basic $ 0.72 $ 0.72
Diluted $ 0.71 $ 0.71
Weighted average shares outstanding(1):
Basic 80,554 79,828
Diluted 81,298 81,266
1 Pursuant to the retrospective adoption of FSP Emerging Issues Task Force
03-6-1, "Determining Whether Instruments Granted in Share-Based Payment
Transactions Are Participating Securities", basic and diluted weighted
average shares outstanding have been increased by 366 and 160,
respectively for the three months ended August 31, 2008.
SCHEDULE 2
SEGMENT INFORMATION (UNAUDITED)
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands)
Three Months Ended August 31,
2009 2008
Revenues:
United States $222,767 $200,696
Canada 81,225 85,944
North America Merchant Services 303,992 286,640
Europe 80,467 61,602
Asia-Pacific 25,473 20,718
International Merchant Services 105,940 82,320
Money Transfer 31,378 36,797
Total Revenues $441,310 $405,757
Operating Income:
North America Merchant Services $75,921 $83,069
International Merchant Services 28,749 20,402
Money Transfer 3,403 4,478
Corporate (15,427) (14,852)
Operating Income $92,646 $93,097
SCHEDULE 3
UNAUDITED CONSOLIDATED BALANCE SHEETS
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands)
August 31, May 31,
2009 2009(1)
Assets
Cash and cash equivalents $1,072,349 $426,935
Accounts receivable, net 125,676 122,831
Claims receivable, net 881 607
Settlement processing assets 11,990 6,675
Inventory, net 13,283 5,914
Deferred income taxes 2,984 3,789
Prepaid expenses and other current assets 25,393 28,437
Current assets 1,252,556 595,188
Property and equipment, net 182,184 176,226
Goodwill 626,212 625,120
Other intangible assets, net 251,076 258,094
Deferred income taxes 93,605 -
Other assets 25,295 22,193
Total assets $2,430,928 $1,676,821
Liabilities and Shareholders' Equity
Lines of credit $ 12,122 $ 10,174
Notes payable - current portion 95,893 29,393
Payables to money transfer beneficiaries 7,878 12,343
Accounts payable and accrued liabilities 165,690 167,700
Settlement processing obligations 723,812 106,934
Income taxes payable 24,378 9,633
Current liabilities 1,029,773 336,177
Notes payable 374,366 167,610
Deferred income taxes 76,652 76,405
Other long-term liabilities 22,837 19,009
Total liabilities 1,503,628 599,201
Commitments and contingencies
Redeemable noncontrolling interests 96,613 399,377
Shareholders' equity:
Preferred stock - -
Common stock - -
Paid-in capital 414,892 405,241
Retained earnings 404,934 273,090
Accumulated other comprehensive
income (loss) 9 (10,901)
Total Global Payments
shareholders' equity 819,835 667,430
Noncontrolling interest 10,852 10,813
Total equity 830,687 678,243
Total liabilities and
equity $2,430,928 $1,676,821
1 May 31, 2009 amounts have been adjusted to retrospectively conform with
FAS 160 and EITF Topic D-98.
SCHEDULE 4
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands)
Three Months Ended
August 31,
2009 2008(1)
Cash flows from operating activities:
Net income including noncontrolling
interests (2) $ 62,444 $ 65,848
Adjustments to reconcile net income
including noncontrolling interests to net cash
provided by operating activities:
Depreciation and amortization of
property and equipment 9,002 9,553
Amortization of acquired intangibles 7,920 7,243
Share-based compensation expense 3,004 3,291
Provision for operating losses and bad debts 6,769 5,614
Deferred income taxes 1,596 934
Other, net (158) (266)
Changes in operating assets and liabilities,
net of the effects of acquisitions:
Accounts receivable (2,883) (41,189)
Claims receivable (4,137) (5,445)
Settlement processing assets and
obligations, net 608,711 (4,206)
Inventory (7,381) (2,500)
Prepaid expenses and other assets (58) 2,502
Payables to money transfer beneficiaries (4,465) 4,628
Accounts payable and accrued liabilities 1,379 3,392
Income taxes payable 14,765 18,375
Net cash provided by operating activities 696,508 67,774
Cash flows from investing activities:
Business and intangible asset acquisitions (249) (442,123)
Capital expenditures (11,101) (7,663)
Proceeds from sale of investment and
contractual rights 253 5,737
Net cash used in investing activities (11,097) (444,049)
Cash flows from financing activities:
Net borrowings on lines of credit 1,948 9,106
Proceeds from issuance of notes payable 300,487 200,000
Principal payments under notes payable (27,487) -
Acquisition of redeemable noncontrolling
interests (307,675) -
Proceeds from stock issued under
share-based compensation plans 4,048 2,910
Tax benefit from share-based compensation plans 2,599 976
Dividends paid (1,616) (1,596)
Contribution from noncontrolling interest holder - 8,857
Distribution to noncontrolling interests (13,998) (2,469)
Net cash (used in) provided by
financing activities (41,694) 217,784
Effect of exchange rate changes on cash 1,697 (9,848)
Increase (decrease) in cash and cash
equivalents 645,414 (168,339)
Cash and cash equivalents, beginning of period 426,935 456,060
Cash and cash equivalents, end of period $1,072,349 $287,721
1 Certain amounts for the three months ended August 31, 2008 have been
adjusted to retrospectively conform with FAS 160 and EITF Topic D-98.
2 Based on adoption of FAS 160, net income presented includes net income
attributable to noncontrolling interest, net of taxes of $4,613 and
$8,321, respectively.
SCHEDULE 5
CONSTANT CURRENCY SUMMARY and FY2009 RECONCILIATION SCHEDULE
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
Constant Currency Summary
(in millions, except for per share data) Q1 FY10 % change
Actual Q1 FY08
Fiscal 2010 Revenues
Constant currency (1) $462 14%
Foreign currency impact (2) (21) -5%
GAAP Revenues $441 9%
Fiscal 2010 Diluted Earnings Per Share
Constant currency (1) $ 0.78 10%
Foreign currency impact (2) (0.07) (10%)
GAAP Diluted EPS $ 0.71 0%
We supplemented our reporting of total revenues and earnings per share
information determined in accordance with GAAP by reporting revenues and
earnings per share for fiscal 2010 on a "constant currency" basis in this
earnings release as a measure to help evaluate performance. We calculated
revenues and earnings per share on a constant currency basis by converting
our fiscal 2010 actual revenues and expenses at fiscal 2009 exchange
rates. We exclude the impact of exchange rate fluctuations in order to
more clearly focus on the factors we believe are pertinent to the daily
management of our operations, and our management uses constant currency
measures to evaluate the impact of operational business decisions. Our
revenues and earnings per share reported on a constant currency basis
should be considered in addition to, and not as a substitute for, revenues
and earnings per share determined in accordance with GAAP. Our measures of
revenues and earnings per share on a constant currency basis reflect
management
1 Reflects current period results on a pro forma basis as if foreign
currency rates did not change from the comparable prior year period.
2 Reflects the impact of changes in foreign currency rates from the
comparable prior year period.
FY2009 Reconciliation Schedule
For Year Ended May 31, 2009
(in millions, except for per share data) Normalized Impairment(3) GAAP
(Unaudited)
Revenues
Total Operating expenses 1,292,431 147,664 1,440,095
Operating income 309,093 (147,664) 161,429
Net income
Diluted shares (4) 81,049 - 81,049
Diluted earnings per share $ 2.23 $(1.77) $0.46
We supplemented our reporting of earnings per share information determined
in accordance with GAAP by reporting earnings per share for fiscal 2009 on
a "normalized" basis in this earnings release as a measure to help
evaluate performance. We exclude the impact of impairment charges in
order to more clearly focus on the factors we believe are pertinent to the
daily management of our operations, and our management uses normalized
measures to evaluate the impact of operational business decisions. Our
earnings per share reported on a normalized basis should be considered in
addition to, and not as a substitute for, earnings per share determined in
accordance with GAAP. Our measures of earnings per share on a normalized
basis reflect management's judgment of particular items, and may not be
comparable to similarly titled measures reported by other companies.
3 Impairment charges consist of goodwill and other intangible asset
impairments in the Money Transfer segment. Also reflects the related
income tax benefit.
4 Pursuant to the retrospective adoption of FSP Emerging Issues Task Force
03-6-1, "Determining Whether Instruments Granted in Share-Based Payment
Transactions Are Participating Securities", diluted weighted average
shares outstanding have been increased by 57 for the twelve months ended
May 31, 2009.
Contact: Jane M. Elliott
770-829-8234 Voice
770-829-8267 Fax
[email protected]
For further information: Jane M. Elliott, +1-770-829-8234 Voice, +1-770-829-8267 Fax, [email protected] Web Site: http://www.globalpaymentsinc.com
Share this article