Exhibit 99.1
Contact: Jane M. Forbes
770-829-8234 Voice
770-829-8267 Fax
investor.relations@globalpay.com
Global Payments Reports Third Quarter Earnings
ATLANTA, March 17, 2004 — Global Payments Inc. (NYSE: GPN) today announced results for the third quarter ended February 29, 2004. Revenue grew 30 percent to $162.6 million compared to $124.6 million in the prior year. This includes $18.3 million in revenue recorded in the current quarter as a result of our recent acquisitions, which primarily consists of DolEx and, to a lesser extent, the MUZO acquisition which was announced on February 20, 2004. Net income grew 36 percent to $16.5 million compared to $12.1 million in the prior year quarter and diluted earnings per share grew 31 percent to $0.42 compared to $0.32 in the prior year quarter.
For the nine months ending February 29, 2004, revenue grew 17 percent to $447.5 million compared to $381.8 million in the prior year period. Net income grew 24 percent to $50.1 million from $40.3 million in the prior year period and diluted earnings per share grew 21 percent to $1.29 from $1.07 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 $47.2 million and $1.22, respectively.
Comments and Outlook
Chairman, President and CEO, Paul R. Garcia, stated, “This quarter marks our official entrance into the growing European payments market through our acquisition of MUZO, and we are excited about the expansion opportunities it will provide to us throughout this region. We are delighted with our strong quarterly results, which were primarily driven by high-teen transaction growth in our ISO and domestic direct distribution channels. In addition, we now have a full quarter of DolEx included in our results and are very pleased with the performance of this important channel. Lastly, we continue to gain operating leverage through greater economies of scale and the ongoing consolidation of operating functions. As a result, we are raising our fiscal 2004 annual revenue guidance of $597 million to $617 million to a range of $610 million to
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Global Payments Reports Third Quarter Earnings
March 17, 2004
Page 2
Comments and Outlook, continued
$620 million, reflecting growth of 18 percent to 20 percent versus $516 million in fiscal 2003. In addition, we are raising our fiscal 2004 annual diluted earnings per share guidance of $1.66 to $1.73 to a range of $1.71 to $1.74, reflecting growth of 20 percent to 22 percent versus prior year results of $1.43 per share, excluding restructuring charges.”1
Conference Call
Global Payments will hold a conference call on March 18, 2004 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 March 31, 2004.
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 and Europe. Global Payments offers a comprehensive line of processing solutions for credit and debit cards, business-to-business purchasing cards, gift cards, check guarantee, check verification and recovery, as well as terminal management and money transfer services. For additional information about the company and its services, visit www.globalpaymentsinc.com.
| 1 | The fiscal 2003 diluted earnings per share of $1.41 on a GAAP basis reflects restructuring charges of $0.8 million, net of tax, or $0.02 diluted earnings per share. Restructuring charges through the nine month period ended February 29, 2004 were $2.9 million, net of tax, or $0.07 diluted earnings per share. We anticipate to incur additional restructuring charges during the balance of fiscal 2004, relating to the activities announced in our fourth quarter of fiscal 2003. |
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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, but not limited to, our most recent report on Form 10-Q. 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 February 29/28, |
||||||||
| 2004 |
2003 |
|||||||
| Revenues |
$ | 162,560 | $ | 124,573 | ||||
| Operating expenses: |
||||||||
| Cost of service |
71,773 | 62,682 | ||||||
| Sales, general and administrative |
60,355 | 40,108 | ||||||
| 132,128 | 102,790 | |||||||
| Operating income |
30,432 | 21,783 | ||||||
| Other income (expense): |
||||||||
| Interest and other income |
466 | 219 | ||||||
| Interest and other expense |
(2,337 | ) | (1,172 | ) | ||||
| Minority interest |
(2,198 | ) | (1,505 | ) | ||||
| (4,069 | ) | (2,458 | ) | |||||
| Income before income taxes |
26,363 | 19,325 | ||||||
| Provision for income taxes |
9,860 | 7,228 | ||||||
| Net income |
$ | 16,503 | $ | 12,097 | ||||
| Earnings per share: |
||||||||
| Basic |
$ | 0.44 | $ | 0.33 | ||||
| Diluted |
$ | 0.42 | $ | 0.32 | ||||
| Weighted average shares outstanding: |
||||||||
| Basic |
37,725 | 36,993 | ||||||
| Diluted |
39,329 | 37,894 | ||||||
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands, except per share data)
| Nine Months Ended February 29/28, |
||||||||
| 2004 |
2003 |
|||||||
| Revenues |
$ | 447,471 | $ | 381,762 | ||||
| Operating expenses: |
||||||||
| Cost of service |
201,209 | 193,963 | ||||||
| Sales, general and administrative |
157,842 | 116,945 | ||||||
| Restructuring |
4,703 | — | ||||||
| 363,754 | 310,908 | |||||||
| Operating income |
83,717 | 70,854 | ||||||
| Other income (expense): |
||||||||
| Interest and other income |
1,219 | 733 | ||||||
| Interest and other expense |
(3,972 | ) | (3,380 | ) | ||||
| Minority interest |
(5,564 | ) | (3,842 | ) | ||||
| (8,317 | ) | (6,489 | ) | |||||
| Income before income taxes |
75,400 | 64,365 | ||||||
| Provision for income taxes |
28,200 | 24,072 | ||||||
| Net income |
$ | 47,200 | $ | 40,293 | ||||
| Earnings per share: |
||||||||
| Basic |
$ | 1.26 | $ | 1.09 | ||||
| Diluted |
$ | 1.22 | $ | 1.07 | ||||
| Weighted average shares outstanding: |
||||||||
| Basic |
37,444 | 36,914 | ||||||
| Diluted |
38,832 | 37,769 | ||||||
CONSOLIDATED CONDENSED BALANCE SHEETS
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands)
| February 29, 2004 |
May 31, 2003 | |||||
| (Unaudited) | ||||||
| Assets |
||||||
| Cash and cash equivalents |
$ | 85,890 | $ | 38,010 | ||
| Accounts receivable, net |
47,932 | 44,929 | ||||
| Claims receivable, net |
631 | 608 | ||||
| Net settlement processing receivable |
79,637 | 68,070 | ||||
| Other current assets |
19,696 | 10,486 | ||||
| Current assets |
233,786 | 162,103 | ||||
| Property and equipment, net |
92,400 | 51,785 | ||||
| Goodwill |
327,401 | 161,216 | ||||
| Intangible assets, net |
187,769 | 137,898 | ||||
| Other assets |
10,519 | 5,132 | ||||
| Total assets |
$ | 851,875 | $ | 518,134 | ||
| Liabilities & Shareholders’ Equity |
||||||
| Line of credit |
$ | 161,000 | $ | — | ||
| Line of credit with related party |
82,701 | 33,900 | ||||
| Accounts payable and other accrued liabilities |
79,320 | 61,405 | ||||
| Obligations under capital leases |
1,161 | 1,456 | ||||
| Current liabilities |
324,182 | 96,761 | ||||
| Notes payable |
11,994 | — | ||||
| Obligations under capital leases |
2,370 | 3,251 | ||||
| Other accrued liabilities |
53,115 | 28,455 | ||||
| Total liabilities |
391,661 | 128,467 | ||||
| Minority interest in equity of subsidiaries |
31,893 | 23,241 | ||||
| Shareholders’ equity |
428,321 | 366,426 | ||||
| Total liabilities & shareholders’ equity |
$ | 851,875 | $ | 518,134 | ||
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands)
| Nine Months Ended February 29/28, |
||||||||
| 2004 |
2003 |
|||||||
| Cash flows from operating activities: |
||||||||
| Net income |
$ | 47,200 | $ | 40,293 | ||||
| Non-cash items |
||||||||
| Restructuring |
387 | — | ||||||
| Depreciation and amortization |
25,101 | 24,226 | ||||||
| Minority interest in earnings |
5,564 | 3,842 | ||||||
| Other, net |
5,840 | 7,769 | ||||||
| Changes in working capital, which provided (used) cash |
||||||||
| Settlement processing |
(17,885 | ) | (30,877 | ) | ||||
| Other, net |
2,600 | 7,608 | ||||||
| Net cash provided by operating activities |
68,807 | 52,861 | ||||||
| Cash flows from investing activities: |
||||||||
| Capital expenditures |
(15,042 | ) | (12,707 | ) | ||||
| Business acquisitions, net of cash acquired |
(94,965 | ) | (1,153 | ) | ||||
| Net cash used in investing activities |
(110,007 | ) | (13,860 | ) | ||||
| Cash flows from financing activities: |
||||||||
| Net borrowings (payments) on line of credit |
161,000 | (22,000 | ) | |||||
| Net borrowings on line of credit restricted for merchant funding |
48,801 | — | ||||||
| Principal payments under capital leases and other notes |
(115,694 | ) | (1,991 | ) | ||||
| Net stock issued to employees under stock plans and dividends |
164 | (965 | ) | |||||
| Distributions to minority interests |
(6,674 | ) | (5,340 | ) | ||||
| Net cash provided by (used in) financing activities |
87,597 | (30,296 | ) | |||||
| Effect of exchange rate changes on cash |
1,483 | 1,469 | ||||||
| Increase in cash and cash equivalents |
47,880 | 10,174 | ||||||
| Cash and cash equivalents, beginning of period |
38,010 | 19,194 | ||||||
| Cash and cash equivalents, end of period |
$ | 85,890 | $ | 29,368 | ||||
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands, except per share data)
| Nine Months Ending February 29, 2004 |
||||||||||||
| Normalized |
Restructuring1 |
GAAP |
||||||||||
| Revenue |
$ | 447,471 | $ | — | $ | 447,471 | ||||||
| Operating expenses: |
||||||||||||
| Cost of service |
201,209 | — | 201,209 | |||||||||
| Sales, general and administrative |
157,842 | — | 157,842 | |||||||||
| Restructuring |
— | 4,703 | 4,703 | |||||||||
| 359,051 | 4,703 | 363,754 | ||||||||||
| Operating income |
88,420 | (4,703 | ) | 83,717 | ||||||||
| Other income/(expense) |
||||||||||||
| Interest and other income |
1,219 | — | 1,219 | |||||||||
| Interest and other expense |
(3,972 | ) | — | (3,972 | ) | |||||||
| Minority interest in earnings |
(5,564 | ) | — | (5,564 | ) | |||||||
| (8,317 | ) | — | (8,317 | ) | ||||||||
| Income before income taxes |
80,103 | (4,703 | ) | 75,400 | ||||||||
| Provision for income taxes |
29,959 | (1,759 | ) | 28,200 | ||||||||
| Net income |
$ | 50,144 | $ | (2,944 | ) | $ | 47,200 | |||||
| Basic shares |
37,444 | — | 37,444 | |||||||||
| Basic earnings per share |
$ | 1.34 | $ | (0.08 | ) | $ | 1.26 | |||||
| Diluted shares |
38,832 | — | 38,832 | |||||||||
| Diluted earnings per share |
$ | 1.29 | $ | (0.07 | ) | $ | 1.22 | |||||
| 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. |