For Immediate Release Contact: Betty Feezor 404-728-3204 Voice 404-728-3417 Fax investor.relations@globalpay.com -------------------------------- GLOBAL PAYMENTS ANNOUNCES THIRD QUARTER RESULTS ATLANTA, March 21, 2001 --- Global Payments Inc. ("Global") (NYSE: GPN) completed its spin-off from National Data Corporation and began trading on the New York Stock Exchange on February 1, 2001. Today, Global announced its third fiscal quarter financial results. These results are stated on a normalized basis, which excludes the impact of divested businesses and other non-recurring items, and includes certain pro forma costs assuming the spin-off occurred on June 1, 1999. For the third fiscal quarter ended February 28, 2001, normalized revenue was $80.7 million, net income was $5.8 million, and basic earnings per share was $0.22. These results compare to prior year third fiscal quarter normalized revenue of $79.6 million, net income of $6.3 million, and basic earnings per share of $0.24. For the nine months ended February 28, 2001, normalized revenue was $247.6 million, net income was $22.2 million, and basic earnings per share was $0.84. These results compare to prior year same period normalized revenue of $245.3 million, net income of $23.6 million, and basic earnings per share of $0.88. The year over year results reflect growth of direct card transactions in the mid-teens offset by declines in the funds transfer and indirect businesses. Global continues to be a strong generator of cash, with EBITDA of $17.0 million for the quarter. On March 20, 2001 Global closed its transaction with Canadian Imperial Bank of Commerce (CIBC) to acquire certain net assets of CIBC's merchant acquiring business and to form a ten year marketing alliance to offer credit and debit card payment products and services to merchants in Canada. Global issued 9,764,623 shares of unregistered common stock to CIBC, valued at $133.6 million on the closing date, providing CIBC with a 26.25% ownership position in Global Payments. Global's results for its fourth quarter ending May 31, 2001 will include a partial period of CIBC results. In commenting on third quarter results, Paul R. Garcia, chief executive officer, said, "We are pleased with the progress we have made to-date in our core business and are encouraged by these results. With the completion of the spin-off from NDC, we are now operating as a stand alone public company focused on providing electronic payment processing services. The acquisition of CIBC's merchant acquiring business is an important element in the continued expansion of our business in North America." Global Payments Inc. is a leading provider of electronic transaction processing services to merchants, Independent Sales Organizations (ISOs), financial institutions, government agencies and multi-national corporations. Global Payments offers a comprehensive line of payment solutions, including credit and debit cards, business-to-business purchasing cards, gift cards, check guarantee, check verification and recovery, terminal management and funds transfer services. This document may contain forward-looking statements concerning the Company's operations, current and future performance and financial condition. These items involve risks and uncertainties such as product demand, market and customer acceptance, the effect of economic conditions, competition, pricing, development difficulties, the ability to consummate and integrate acquisitions, and other risks detailed in the Company's SEC filings, including the most recent Form 10. The Company undertakes no obligation to revise any of these statements to reflect future circumstances or the occurrence of unanticipated events. 2 GAAP Reporting: Includes divested businesses UNAUDITED CONSOLIDATED STATEMENTS OF INCOME GLOBAL PAYMENTS INC. AND SUBSIDIARIES (In thousands, except per share data) ================================================================================ Three Months Ended February 28/29, ---------------------------------- 2001 2000 ------- ------- Revenues $80,674 $81,827 - -------------------------------------------------------------------------------- Operating expenses: Cost of service 44,607 44,541 Sales, general and administrative 24,101 23,866 ------- ------- 68,708 68,407 ------- ------- Operating income 11,966 13,420 - -------------------------------------------------------------------------------- Other income (expense): Interest and other income 260 513 Interest and other expense (1,425) (1,626) Minority interest (1,295) (1,031) ------- ------- (2,460) (2,144) ------- ------- Income before income taxes 9,506 11,276 Provision for income taxes 3,660 4,346 - -------------------------------------------------------------------------------- Net income $ 5,846 $ 6,930 ======= ======= Basic earnings per share: $ 0.22 $ 0.26 ======= ======= Weighted average basic shares outstanding 26,475 26,336 ======= ======= 3 GAAP Reporting: Includes divested businesses UNAUDITED CONSOLIDATED STATEMENTS OF INCOME GLOBAL PAYMENTS INC. AND SUBSIDIARIES (In thousands, except per share data) ================================================================================ Nine Months Ended February 28/29, --------------------------------- 2001 2000 -------- -------- Revenues $250,496 $255,828 - -------------------------------------------------------------------------------- Operating expenses: Cost of service 133,738 136,454 Sales, general and administrative 72,239 70,140 -------- -------- 205,977 206,594 -------- -------- Operating income 44,519 49,234 - -------------------------------------------------------------------------------- Other income (expense): Interest and other income 1,490 1,157 Interest and other expense (4,815) (4,805) Minority interest (3,955) (3,025) -------- -------- (7,280) (6,673) -------- -------- Income before income taxes 37,239 42,561 Provision for income taxes 14,337 16,404 - -------------------------------------------------------------------------------- Net income $ 22,902 $ 26,157 ======== ======== Basic earnings per share: $ 0.87 $ 0.98 ======== ======== Weighted average basic shares outstanding 26,336 26,712 ======== ======== 4 UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW GLOBAL PAYMENTS INC. AND SUBSIDIARIES (In thousands) ================================================================================ Nine Months Ended February 28/29, --------------------------------- 2001 2000 --------- -------- Cash flows from operating activities: Net income $ 22,902 $ 26,157 Non-cash items Depreciation and amortization 14,806 14,709 Deferred income taxes 1,054 (698) Minority interest in earnings 3,954 3,312 Other, net 2,144 1,923 Changes in working capital, which provided (used) cash Merchant processing 5,853 (1,795) Other, net 4,182 5,376 --------- -------- Net cash provided by operating activities 54,895 48,984 --------- -------- Cash flows from investing activities: Capital expenditures (5,934) (7,040) Net business development activities 752 - --------- -------- Net cash used by investing activities (5,182) (7,040) --------- -------- Cash flows from financing activities: Net borrowings on line of credit 59,000 - Net borrowings from (repayments to) NDC (105,310) (27,474) Principal payments under capital leases and other notes (2,259) (8,465) Distributions to minority interests (3,360) (2,505) --------- -------- Net cash used in financing activities (51,929) (38,444) --------- -------- Increase in cash and cash equivalents (2,216) 3,500 Cash and cash equivalents, beginning of period 2,766 1,356 --------- -------- Cash and cash equivalents, end of period $ 550 $ 4,856 ========= ======== 5 CONSOLIDATED CONDENSED BALANCE SHEETS GLOBAL PAYMENTS INC. AND SUBSIDIARIES (In thousands) ================================================================================ February 28, May 31, 2001 2000 -------- -------- (Unaudited) Assets - ------ Cash and cash equivalents $ 550 $ 2,766 Accounts receivable, net 38,494 34,229 Merchant processing receivable 19,017 32,213 Other current assets 7,921 11,017 -------- -------- Current assets 65,982 80,225 Property and equipment, net 24,119 28,665 Intangible assets, net 166,494 173,726 Other assets 5,442 5,330 -------- -------- Total assets $262,037 $287,946 ======== ======== Liabilities & Shareholders' Equity - ---------------------------------- Line of credit $ 59,000 $ - Due to NDC - 96,125 Merchant processing payable 4,660 11,880 Accounts payable and other accrued liabilities 32,403 26,748 Obligations under capital leases 2,718 2,900 -------- -------- Current liabilities 98,781 137,653 Obligations under capital leases 2,255 4,332 Other accrued liabilities 11,324 7,694 -------- -------- Total liabilities 112,360 149,679 -------- -------- Minority interest in equity of subsidiaries 19,066 18,472 Shareholders' equity 130,611 119,795 -------- -------- Total liabilities & shareholders' equity $262,037 $287,946 ======== ======== 6
RECONCILIATION OF GAAP TO NORMALIZED RESULTS GLOBAL PAYMENTS INC. (In thousands, except per share data) - ------------------------------------------------------------------------------------------------------------------------------- Three Months Ended Nine Months Ended February 28/29, February 28/29, ------------------------ --------------------------- 2001 2000 2001 2000 ---------- ---------- ----------- ----------- Revenue - ------- GAAP revenue $ 80,674 $ 81,827 $ 250,496 $ 255,828 Impact of divested businesses and other, net - (2,213) (2,878) (10,561) ---------- ---------- ---------- ----------- Normalized revenue $ 80,674 $ 79,614 $ 247,618 $ 245,267 ========== ========== ========== ========== Basic earnings per share - ------------------------ GAAP basic earnings per share $ 0.22 $ 0.26 $ 0.87 $ 0.98 Interest expense associated with a higher average cost of funds that will be incurred as a separate independent public company(1) - - (0.02) (0.01) Additional sales, general and administrative expenses that will be incurred as a separate independent public company(1) - (0.02) (0.01) (0.07) Impact of losses from divested businesses and other, net - - - (0.02) ---------- ---------- ---------- --------- Normalized basic earnings per share $ 0.22 $ 0.24 $ 0.84 $ 0.88 ========== ========== ========== ========= - ------------------------ (1) Adjustment and pro forma methodology included in our latest Registration Statement on Form 10 filed on December 28, 2000 for the year ended May 31, 2000 and the three months ended August 31, 2000. Press Release Page 7