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 Second Quarter Earnings
ATLANTA, December 18, 2003 — Global Payments Inc. (NYSE: GPN) today announced results for the second quarter ended November 30, 2003. Revenue grew 15% to $148.4 million compared to $129.5 million in the prior year. This includes $3.8 million in revenue recorded in the current quarter as a result of the DolEx money transfer acquisition that closed on November 12, 2003. Net income grew 24% to $16.8 million compared to $13.6 million in the prior year quarter and diluted earnings per share grew 19% to $0.43 compared to $0.36 in the prior year quarter, excluding a restructuring charge of $2.0 million, net of tax or $0.05 per share in the current quarter.
The company continues to make progress consolidating certain locations to gain greater efficiencies and reduce costs. Including the restructuring charge related to this plan, second quarter GAAP net income and diluted earnings per share were $14.9 million and $0.38, respectively, compared to $13.6 million and $0.36, respectively, in the prior year. Global expects to complete this plan by the fourth quarter of fiscal 2004.
For the six months ending November 30, 2003, revenue grew 11% to $284.9 million compared to $257.2 million in the prior year period. Net income grew 19% to $33.6 million from $28.2 million in the prior period and diluted earnings per share grew 16% to $0.87 from $0.75 in the prior year period, excluding a restructuring charge of $2.9 million, net of tax or $0.07 per share in the current year period. Year-to-date GAAP net income and diluted earnings per share were $30.7 million and $0.80, respectively.
Comments and Outlook
Chairman, President and CEO, Paul R. Garcia, stated, “We are very pleased with the addition of DolEx to the Global family and are excited about the expansion opportunities within the payments sector that it will provide. We have reported another quarter of solid growth in our merchant services business, primarily driven by our ISO and domestic direct distribution channels. In addition, our ongoing consolidation of operating functions, other cost reduction initiatives and last year’s
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Global Payments Reports Second Quarter Earnings
December 18, 2003
Page 2
Comments and Outlook, continued
acquisition integration efforts continue to produce operating margin improvements. As a result, we are reaffirming our annual revenue guidance of $588 million to $608 million and diluted earnings per share guidance of $1.65 to $1.72 for fiscal 2004. This guidance excludes the impact of restructuring charges.”
Conference Call
Global Payments will hold a conference call on December 19, 2003, at 10:30 a.m. EST to discuss financial results and business highlights. The conference call can be accessed by calling 1-888-428-4480 (U.S.) or 1-651-291-5254 (internationally), or via Web cast at www.globalpaymentsinc.com. A replay of the call will be available on the Global Payments Web site through January 3, 2004.
Global Payments Inc. (NYSE:GPN) is a leading provider of electronic transaction processing services to consumers, merchants, Independent Sales Organizations (ISOs), financial institutions, government agencies and multi-national corporations located throughout the United States, Canada, Latin America 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
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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 November 30, |
||||||||
| 2003 |
2002 |
|||||||
| Revenues |
$ | 148,447 | $ | 129,461 | ||||
| Operating expenses: |
||||||||
| Cost of service |
67,274 | 64,395 | ||||||
| Sales, general and administrative |
51,947 | 41,311 | ||||||
| Restructuring |
3,123 | — | ||||||
| 122,344 | 105,706 | |||||||
| Operating income |
26,103 | 23,755 | ||||||
| Other income (expense): |
||||||||
| Interest and other income |
429 | 243 | ||||||
| Interest and other expense |
(1,059 | ) | (1,199 | ) | ||||
| Minority interest |
(1,716 | ) | (1,101 | ) | ||||
| (2,346 | ) | (2,057 | ) | |||||
| Income before income taxes |
23,757 | 21,698 | ||||||
| Provision for income taxes |
8,885 | 8,116 | ||||||
| Net Income |
$ | 14,872 | $ | 13,582 | ||||
| Earnings per share: |
||||||||
| Basic |
$ | 0.40 | $ | 0.37 | ||||
| Diluted |
$ | 0.38 | $ | 0.36 | ||||
| Weighted average shares outstanding: |
||||||||
| Basic |
37,466 | 36,912 | ||||||
| Diluted |
38,861 | 37,639 | ||||||
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands, except per share data)
| Six Months Ended November 30, |
||||||||
| 2003 |
2002 |
|||||||
| Revenues |
$ | 284,911 | $ | 257,189 | ||||
| Operating expenses: |
||||||||
| Cost of service |
129,436 | 131,281 | ||||||
| Sales, general and administrative |
97,488 | 76,836 | ||||||
| Restructuring |
4,703 | — | ||||||
| 231,627 | 208,117 | |||||||
| Operating income |
53,284 | 49,072 | ||||||
| Other income (expense): |
||||||||
| Interest and other income |
753 | 513 | ||||||
| Interest and other expense |
(1,635 | ) | (2,207 | ) | ||||
| Minority interest |
(3,366 | ) | (2,337 | ) | ||||
| (4,248 | ) | (4,031 | ) | |||||
| Income before income taxes |
49,036 | 45,041 | ||||||
| Provision for income taxes |
18,339 | 16,846 | ||||||
| Net Income |
$ | 30,697 | $ | 28,195 | ||||
| Earnings per share: |
||||||||
| Basic |
$ | 0.82 | $ | 0.76 | ||||
| Diluted |
$ | 0.80 | $ | 0.75 | ||||
| Weighted average shares outstanding: |
||||||||
| Basic |
37,304 | 36,875 | ||||||
| Diluted |
38,585 | 37,707 | ||||||
CONSOLIDATED CONDENSED BALANCE SHEETS
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands)
| November 30, 2003 |
May 31, 2003 | |||||
| (Unaudited) | ||||||
| Assets |
||||||
| Cash and cash equivalents |
$ | 79,753 | $ | 38,010 | ||
| Accounts receivable, net |
45,386 | 44,929 | ||||
| Claims receivable, net |
651 | 608 | ||||
| Settlement processing receivable |
— | 34,170 | ||||
| Other current assets |
17,781 | 10,486 | ||||
| Current assets |
143,571 | 128,203 | ||||
| Property and equipment, net |
62,681 | 51,785 | ||||
| Goodwill |
291,294 | 161,216 | ||||
| Intangible assets, net |
182,215 | 137,898 | ||||
| Other assets |
12,724 | 5,132 | ||||
| Total assets |
$ | 692,485 | $ | 484,234 | ||
| Liabilities & Shareholders’ Equity |
||||||
| Notes payable |
$ | 114,229 | $ | — | ||
| Settlement processing payable |
32,210 | — | ||||
| Accounts payable and other accrued liabilities |
78,855 | 61,405 | ||||
| Obligations under capital leases |
1,132 | 1,456 | ||||
| Current liabilities |
226,426 | 62,861 | ||||
| Obligations under capital leases |
2,671 | 3,251 | ||||
| Other accrued liabilities |
31,212 | 28,455 | ||||
| Total liabilities |
260,309 | 94,567 | ||||
| Minority interest in equity of subsidiaries |
22,316 | 23,241 | ||||
| Shareholders’ equity |
409,860 | 366,426 | ||||
| Total liabilities & shareholders’ equity |
$ | 692,485 | $ | 484,234 | ||
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands)
| Six Months Ended November 30, |
||||||||
| 2003 |
2002 |
|||||||
| Cash flows from operating activities: |
||||||||
| Net income |
$ | 30,697 | $ | 28,195 | ||||
| Non-cash items |
||||||||
| Restructuring |
387 | — | ||||||
| Depreciation and amortization |
15,521 | 15,872 | ||||||
| Restructuring and other |
— | — | ||||||
| Minority interest in earnings |
3,366 | 2,337 | ||||||
| Other, net |
3,819 | 5,800 | ||||||
| Changes in working capital, which provided (used) cash |
||||||||
| Settlement processing |
311 | (12,779 | ) | |||||
| Other, net |
874 | 14,600 | ||||||
| Net cash provided by operating activities |
54,975 | 54,025 | ||||||
| Cash flows from investing activities: |
||||||||
| Capital expenditures |
(9,668 | ) | (9,809 | ) | ||||
| Net business development activities |
(61,460 | ) | (968 | ) | ||||
| Net cash used in investing activities |
(71,128 | ) | (10,777 | ) | ||||
| Cash flows from financing activities: |
||||||||
| Net repayments on line of credit |
— | (22,000 | ) | |||||
| Net borrowings on line of credit restricted for merchant funding |
61,203 | — | ||||||
| Principal payments under capital leases and other notes |
(904 | ) | (1,326 | ) | ||||
| Net stock issued to employees under stock plans and dividends |
(814 | ) | (702 | ) | ||||
| Distributions to minority interests |
(4,291 | ) | (3,376 | ) | ||||
| Net cash provided by (used in) financing activities |
55,194 | (27,404 | ) | |||||
| Effect of exchange rate changes on cash |
2,702 | (58 | ) | |||||
| Increase in cash and cash equivalents |
41,743 | 15,786 | ||||||
| Cash and cash equivalents, beginning of period |
38,010 | 19,194 | ||||||
| Cash and cash equivalents, end of period |
$ | 79,753 | $ | 34,980 | ||||
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands, except per share data)
| Three Months Ending November 30, 2003 |
||||||||||||
| Normalized |
Restructuring1 |
GAAP |
||||||||||
| Revenue |
$ | 148,447 | $ | — | $ | 148,447 | ||||||
| Operating expenses: |
||||||||||||
| Cost of service |
67,274 | — | 67,274 | |||||||||
| Sales, general and administrative |
51,947 | — | 51,947 | |||||||||
| Restructuring |
— | 3,123 | 3,123 | |||||||||
| 119,221 | 3,123 | 122,344 | ||||||||||
| Operating income |
29,226 | (3,123 | ) | 26,103 | ||||||||
| Other income/(expense) |
||||||||||||
| Interest and other income |
429 | — | 429 | |||||||||
| Interest and other expense |
(1,059 | ) | — | (1,059 | ) | |||||||
| Minority interest in earnings |
(1,716 | ) | — | (1,716 | ) | |||||||
| (2,346 | ) | — | (2,346 | ) | ||||||||
| Income before income taxes |
26,880 | (3,123 | ) | 23,757 | ||||||||
| Provision for income taxes |
10,053 | (1,168 | ) | 8,885 | ||||||||
| Net income |
$ | 16,827 | $ | (1,955 | ) | $ | 14,872 | |||||
| Basic shares |
37,466 | — | 37,466 | |||||||||
| Basic earnings per share |
$ | 0.45 | $ | (0.05 | ) | $ | 0.40 | |||||
| Diluted shares |
38,861 | — | 38,861 | |||||||||
| Diluted earnings per share |
$ | 0.43 | $ | (0.05 | ) | $ | 0.38 | |||||
| 1 | Primarily relating to severance and facilites due to redundant activities and facility closures, as well as the related income tax benefit using the company’s effective tax rate. |
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands, except per share data)
| Six Months Ending November 30, 2003 |
||||||||||||
| Normalized |
Restructuring1 |
GAAP |
||||||||||
| Revenue |
$ | 284,911 | $ | — | $ | 284,911 | ||||||
| Operating expenses: |
||||||||||||
| Cost of service |
129,436 | — | 129,436 | |||||||||
| Sales, general and administrative |
97,488 | — | 97,488 | |||||||||
| Restructuring |
— | 4,703 | 4,703 | |||||||||
| 226,924 | 4,703 | 231,627 | ||||||||||
| Operating income |
57,987 | (4,703 | ) | 53,284 | ||||||||
| Other income/(expense) |
||||||||||||
| Interest and other income |
753 | — | 753 | |||||||||
| Interest and other expense |
(1,635 | ) | — | (1,635 | ) | |||||||
| Minority interest in earnings |
(3,366 | ) | — | (3,366 | ) | |||||||
| (4,248 | ) | — | (4,248 | ) | ||||||||
| Income before income taxes |
53,739 | (4,703 | ) | 49,036 | ||||||||
| Provision for income taxes |
20,098 | (1,759 | ) | 18,339 | ||||||||
| Net income |
$ | 33,641 | $ | (2,944 | ) | $ | 30,697 | |||||
| Basic shares |
37,304 | — | 37,304 | |||||||||
| Basic earnings per share |
$ | 0.90 | $ | (0.08 | ) | $ | 0.82 | |||||
| Diluted shares |
38,585 | — | 38,585 | |||||||||
| Diluted earnings per share |
$ | 0.87 | $ | (0.07 | ) | $ | 0.80 | |||||
| 1 | Primarily relating to severance and facilities due to redundant activities and facility closures, as well as the related income tax benefit using the company’s effective tax rate. |