EXHIBIT 99.1
For Immediate Release
Contact: Jane M. Forbes
404-728-2719 Voice
404-728-3216 Fax
investor.relations@globalpay.com
Global Payments Reports First Quarter Earnings
ATLANTA, September 17, 2003 — Global Payments Inc. (NYSE: GPN) today announced results for the first quarter ended August 31, 2003. Revenue grew 7% to $136.5 million compared to $127.7 million in the prior year. Net income, excluding the impact of a restructuring charge, grew 15% to $16.8 million as compared to $14.6 million in the prior year quarter, and diluted earnings per share grew 13% to $0.44 compared to $0.39 in the prior year quarter.
During the fourth quarter of fiscal 2003, consistent with its ongoing strategy to consolidate operations, the company committed to a plan to close three operating facilities and consolidate these and other functions into other existing locations. Pursuant to this consolidation plan, the company recognized a $1.6 million restructuring charge during the quarter primarily related to one-time employee termination benefits. Global expects to complete this plan by the fourth quarter of fiscal 2004. To date, Global has spent approximately $3 million on this initiative and expects to spend a total of approximately $8 million.
First quarter GAAP net income and diluted earnings per share were $15.8 million and $0.41, respectively, compared to $14.6 million and $0.39, respectively, in the prior year.
Comments and Outlook
Chairman, President and CEO, Paul R. Garcia, stated, “We are pleased with another solid quarter reflecting our continued growth in our ISO and domestic direct distribution channels. In addition, our ongoing consolidation of operating functions, other cost reduction initiatives and last year’s acquisition integration efforts continue to produce operating margin improvements. As a result, we are reaffirming our annual revenue guidance of $542 million to $562 million and diluted earnings per share guidance of $1.57 to $1.64 for fiscal 2004. This guidance excludes the impact of restructuring charges and our recently announced DolEx acquisition. We are excited about this acquisition and currently expect to close this transaction by the end of 2003.
-More
Global Payments Reports First Quarter Earnings
September 17, 2003
Page 2
Conference Call
Global Payments will hold a conference call on September 18, 2003, at 10:30 a.m. EDT to discuss financial results and business highlights. The conference call can be accessed by calling 1-888-428-4474 (U.S.) or 1-612-338-9017 (internationally), or via Web cast at www.globalpaymentsinc.com. A replay of the call will be available on the Global Payments Web site through September 28, 2003.
Global Payments Inc. (NYSE:GPN) is a leading provider of electronic transaction processing services to merchants, Independent Sales Organizations (ISOs), financial institutions, government agencies and multi-national corporations located throughout the United States, Canada and Europe. 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 money transfer services. For additional information about the company and its services, visit www.globalpaymentsinc.com
###
This announcement and comments made by Global Payments’ management during the conference call may contain forward-looking statements pursuant to the “safe-harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward- looking statements involve risks and uncertainties such as product demand, market and customer acceptance, the effect of economic conditions, competition, pricing, development difficulties, foreign currency risks, costs of capital, continued certification by credit card associations, the ability to consummate and integrate acquisitions, and other risks detailed in the Company’s SEC filings, including the most recent Form 10-K. The Company undertakes no obligation to revise any of these statements to reflect future circumstances or the occurrence of unanticipated events.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands, except per share data)
| Three Months Ended August 31, |
||||||||
| 2003 |
2002 |
|||||||
| Revenues |
$ | 136,464 | $ | 127,728 | ||||
| Operating expenses: |
||||||||
| Cost of service |
62,162 | 66,886 | ||||||
| Sales, general and administrative |
45,541 | 35,525 | ||||||
| Restructuring |
1,580 | — | ||||||
| 109,283 | 102,411 | |||||||
| Operating income |
27,181 | 25,317 | ||||||
| Other income (expense): |
||||||||
| Interest and other income |
324 | 270 | ||||||
| Interest and other expense |
(575 | ) | (1,008 | ) | ||||
| Minority interest |
(1,650 | ) | (1,236 | ) | ||||
| (1,901 | ) | (1,974 | ) | |||||
| Income before income taxes |
25,280 | 23,343 | ||||||
| Provision for income taxes |
9,455 | 8,730 | ||||||
| Net Income |
$ | 15,825 | $ | 14,613 | ||||
| Earnings per share: |
||||||||
| Basic |
$ | 0.43 | $ | 0.40 | ||||
| Diluted |
$ | 0.41 | $ | 0.39 | ||||
| Weighted average shares outstanding: |
||||||||
| Basic |
37,145 | 36,838 | ||||||
| Diluted |
38,310 | 37,776 | ||||||
CONSOLIDATED CONDENSED BALANCE SHEETS
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands)
| August 31, 2003 |
May 31, 2003 | |||||
| (Unaudited) | ||||||
| Assets |
||||||
| Cash and cash equivalents |
$ | 96,120 | $ | 38,010 | ||
| Accounts receivable, net |
41,673 | 44,929 | ||||
| Claims receivable, net |
789 | 608 | ||||
| Merchant processing receivable, net |
3,166 | 34,170 | ||||
| Other current assets |
10,638 | 10,486 | ||||
| Current assets |
152,386 | 128,203 | ||||
| Property and equipment, net |
50,271 | 51,785 | ||||
| Goodwill |
161,216 | 161,216 | ||||
| Intangible assets, net |
135,021 | 137,898 | ||||
| Other assets |
5,129 | 5,132 | ||||
| Total assets |
$ | 504,023 | $ | 484,234 | ||
| Liabilities & Shareholders’ Equity |
||||||
| Accounts payable and other accrued liabilities |
$ | 67,135 | $ | 61,405 | ||
| Obligations under capital leases |
1,200 | 1,456 | ||||
| Current liabilities |
68,335 | 62,861 | ||||
| Obligations under capital leases |
2,965 | 3,251 | ||||
| Other accrued liabilities |
28,501 | 28,455 | ||||
| Total liabilities |
99,801 | 94,567 | ||||
| Minority interest in equity of subsidiaries |
22,929 | 23,241 | ||||
| Shareholders’ equity |
381,293 | 366,426 | ||||
| Total liabilities & shareholders’ equity |
$ | 504,023 | $ | 484,234 | ||
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands)
| Three Months Ended August 31, |
||||||||
| 2003 |
2002 |
|||||||
| Cash flows from operating activities: |
||||||||
| Net income |
$ | 15,825 | $ | 14,613 | ||||
| Non-cash items |
||||||||
| Depreciation and amortization |
7,519 | 7,860 | ||||||
| Minority interest in earnings |
1,650 | 1,236 | ||||||
| Other, net |
1,454 | 2,888 | ||||||
| Changes in working capital, which provided (used) cash |
||||||||
| Merchant processing |
5,570 | (2,406 | ) | |||||
| Other, net |
8,875 | (4,449 | ) | |||||
| Net cash provided by operating activities |
40,893 | 19,742 | ||||||
| Cash flows from investing activities: |
||||||||
| Capital expenditures |
(3,128 | ) | (5,201 | ) | ||||
| Net business development activities |
— | (169 | ) | |||||
| Net cash used in investing activities |
(3,128 | ) | (5,370 | ) | ||||
| Cash flows from financing activities: |
||||||||
| Net repayments on line of credit |
— | (13,500 | ) | |||||
| Net borrowings on line of credit restricted for merchant funding |
23,973 | — | ||||||
| Principal payments under capital leases and other notes |
(542 | ) | (676 | ) | ||||
| Net stock issued to employees under stock plans and dividends |
(3 | ) | (216 | ) | ||||
| Distributions to minority interests |
(1,962 | ) | (1,680 | ) | ||||
| Net cash provided by (used in) financing activities |
21,466 | (16,072 | ) | |||||
| Effect of exchange rate changes on cash |
(1,121 | ) | (154 | ) | ||||
| Increase (decrease) in cash and cash equivalents |
58,110 | (1,854 | ) | |||||
| Cash and cash equivalents, beginning of period |
38,010 | 19,194 | ||||||
| Cash and cash equivalents, end of period |
$ | 96,120 | $ | 17,340 | ||||
Unaudited Consolidated Statements of Income
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(in thousands, except per share data)
| Three Months Ending August 31, | 2003 |
|||||||||||
| Normalized |
One-Time1 |
GAAP |
||||||||||
| Revenue |
$ | 136,464 | $ | — | $ | 136,464 | ||||||
| Operating expenses: |
||||||||||||
| Cost of service |
62,162 | — | 62,162 | |||||||||
| Sales, general and administrative |
45,541 | — | 45,541 | |||||||||
| Restructuring and other |
— | 1,580 | 1,580 | |||||||||
| 107,703 | 1,580 | 109,283 | ||||||||||
| Operating income |
28,761 | (1,580 | ) | 27,181 | ||||||||
| Other income/(expense) |
||||||||||||
| Interest and other income |
324 | — | 324 | |||||||||
| Interest and other expense |
(575 | ) | — | (575 | ) | |||||||
| Minority interest in earnings |
(1,650 | ) | — | (1,650 | ) | |||||||
| (1,901 | ) | — | (1,901 | ) | ||||||||
| Income before income taxes |
26,860 | (1,580 | ) | 25,280 | ||||||||
| Income taxes |
10,046 | (591 | ) | 9,455 | ||||||||
| Net income |
$ | 16,814 | $ | (989 | ) | $ | 15,825 | |||||
| Basic shares |
37,145 | — | 37,145 | |||||||||
| Basic earnings per share |
$ | 0.45 | $ | (0.02 | ) | $ | 0.43 | |||||
| Diluted shares |
38,310 | — | 38,310 | |||||||||
| Diluted earnings per share |
$ | 0.44 | $ | (0.03 | ) | $ | 0.41 | |||||
| 1 | One-time adjustments consist of restructuring charges of $1.6 million primarily relating to severance due to redundant activities and facility closures, as well as the related income tax benefit using the company's effective tax rate. |