Exhibit 99.1

For Immediate Release

 

Contact: Jane M. Forbes

770-829-8234 Voice

770-829-8267 Fax

investor.relations@globalpay.com

 

Global Payments Reports Fourth Quarter and Fiscal 2004 Earnings

 

ATLANTA, July 21, 2004 — Global Payments Inc. (NYSE: GPN) today announced results for the fourth quarter and fiscal year ended May 31, 2004. For the fourth quarter, revenue grew 35 percent to $181.8 million compared to $134.3 million in the prior year. This includes $30.6 million in revenue recorded in the current quarter as a result of the company’s DolEx and MUZO acquisitions, which were announced earlier during the 2004 fiscal year. Excluding restructuring charges and a gain on the sale of an investment, net income grew 30 percent to $18.0 million compared to $13.8 million in the prior year quarter and diluted earnings per share grew 28 percent to $0.46 compared to $0.36 in the prior year quarter.

 

For the fiscal year, revenue grew 22 percent to $629.3 million compared to $516.1 million in the prior year period. Excluding restructuring charges and a gain on the sale of an investment, net income grew 26 percent to $68.1 million from $54.1 million in the prior year period and diluted earnings per share grew 22 percent to $1.75 from $1.43 in the prior year period.

 

The above results exclude restructuring and other items to more clearly reflect comparative operating performance. In accordance with GAAP, current and prior period net income and diluted earnings per share include these items (see attached reconciliation schedules). Fourth quarter GAAP net income and diluted earnings per share were $15.2 million and $0.39, respectively, compared to $13.0 million and $0.34, respectively in the prior year. For the 2004 fiscal year, GAAP net income and diluted earnings per share were $62.4 million and $1.60, respectively, compared to $53.3 million and $1.41, respectively in the prior year.

 

During the 2004 fiscal fourth quarter, the company recognized a $4.9 million ($3.1 million, net of tax) restructuring charge. This includes a $3.1 million non-cash charge relating to employee termination benefits. The remainder of this charge relates to Global’s consolidation efforts of three operating facilities and other functions into other existing locations, which was announced in the 2003 fiscal fourth quarter. As of May 31, 2004, these consolidation efforts were substantially complete. In total, the company spent $8.8 million on this plan, consistent with previous estimates. In addition during the quarter, the company recorded a gain on sale of investment in the “Interest and other income” line for $0.6 million, or $0.01 per share.

 

-More


Global Payments Reports Fourth Quarter and Fiscal 2004 Earnings

July 21, 2004

Page 2

 

Comments and Outlook

 

Chairman, President and CEO, Paul R. Garcia, stated, “We are delighted with yet another year of solid financial results. We are very pleased with our DolEx and MUZO acquisitions and look forward to the ongoing growth opportunities provided in both of these markets. We also remain focused on expanding our core domestic direct channels and are encouraged by the strong growth rates we have achieved in this area. Finally, we continue to gain operating leverage through greater economies of scale and the ongoing consolidation of operating functions. For our fiscal 2005, we are providing annual revenue guidance of $722 million to $743 million, or 15% to 18% growth versus $629 million in fiscal 2004 and annual diluted earnings per share guidance of $1.96 to $2.05 for growth of 12% to 17% versus diluted earnings per share of $1.75 in fiscal 2004, excluding restructuring and other items.”1

 

Conference Call

 

Global Payments will hold a conference call on July 22, 2004 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 1-651-291-0900 (internationally), or via Web cast at www.globalpaymentsinc.com. A replay of the call will be available on the Global Payments Web site through August 5, 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, terminal management and money transfer services. For more information about the company and its services, visit www.globalpaymentsinc.com.

 

-More


Global Payments Reports Fourth Quarter and Fiscal 2004 Earnings

July 21, 2004

Page 3

 

1 The fiscal 2004 diluted earnings per share of $1.60 on a GAAP basis reflects restructuring and other items of $5.7 million, net of tax, or $0.15 diluted earnings per share.

 

###

 

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 May 31,

 
     2004

    2003

 

Revenues

   $ 181,848     $ 134,322  
    


 


Operating expenses:

                

Cost of service

     88,144       66,327  

Sales, general and administrative

     59,575       44,328  

Restructuring and other

     4,945       1,257  
    


 


       152,664       111,912  
    


 


Operating income

     29,184       22,410  
    


 


Other income (expense):

                

Interest and other income

     1,139       451  

Interest and other expense

     (2,553 )     (917 )

Minority interest

     (3,421 )     (1,165 )
    


 


       (4,835 )     (1,631 )
    


 


Income before income taxes

     24,349       20,779  

Provision for income taxes

     9,106       7,771  
    


 


Net income

   $ 15,243     $ 13,008  
    


 


Earnings per share:

                

Basic

   $ 0.40     $ 0.35  
    


 


Diluted

   $ 0.39     $ 0.34  
    


 


Weighted average shares outstanding:

                

Basic

     37,800       37,085  

Diluted

     39,320       37,986  


CONSOLIDATED STATEMENTS OF INCOME

 

GLOBAL PAYMENTS INC. AND SUBSIDIARIES

 

(In thousands, except per share data)

 

     Twelve Months Ended
May 31,


 
     2004

    2003

 

Revenues

   $ 629,320     $ 516,084  
    


 


Operating expenses:

                

Cost of service

     289,353       260,290  

Sales, general and administrative

     217,418       161,272  

Restructuring

     9,648       1,257  
    


 


       516,419       422,819  
    


 


Operating income

     112,901       93,265  
    


 


Other income (expense):

                

Interest and other income

     2,358       1,183  

Interest and other expense

     (6,525 )     (4,296 )

Minority interest

     (8,985 )     (5,008 )
    


 


       (13,152 )     (8,121 )
    


 


Income before income taxes

     99,749       85,144  

Provision for income taxes

     37,306       31,844  
    


 


Net income

   $ 62,443     $ 53,300  
    


 


Earnings per share:

                

Basic

   $ 1.66     $ 1.44  
    


 


Diluted

   $ 1.60     $ 1.41  
    


 


Weighted average shares outstanding:

                

Basic

     37,533       36,957  

Diluted

     38,955       37,824  


CONSOLIDATED CONDENSED BALANCE SHEETS

 

GLOBAL PAYMENTS INC. AND SUBSIDIARIES

 

(In thousands)

 

    

May 31,

2004


  

May 31,

2003


Assets

             

Cash and cash equivalents

   $ 34,472    $ 38,010

Accounts receivable, net

     47,414      44,929

Claims receivable, net

     761      608

Settlement processing receivable, net

     95,233      68,070

Other current assets

     25,324      10,486
    

  

Current assets

     203,204      162,103

Property and equipment, net

     97,482      51,785

Goodwill

     342,012      161,216

Intangible assets, net

     182,658      137,898

Other assets

     7,539      5,132
    

  

Total assets

   $ 832,895    $ 518,134
    

  

Liabilities & Shareholders’ Equity

             

Line of credit

   $ 122,000    $ —  

Line of credit with related party

     83,109      33,900

Accounts payable and other accrued liabilities

     79,773      61,405

Obligations under capital leases

     1,190      1,456
    

  

Current liabilities

     286,072      96,761

Notes payable

     10,886      —  

Obligations under capital leases, net of current portion

     2,061      3,251

Other accrued liabilities

     61,324      28,455
    

  

Total liabilities

     360,343      128,467
    

  

Minority interest in equity of subsidiaries

     23,130      23,241

Shareholders’ equity

     449,422      366,426
    

  

Total liabilities & shareholders’ equity

   $ 832,895    $ 518,134
    

  


CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW

 

GLOBAL PAYMENTS INC. AND SUBSIDIARIES

 

(In thousands)

 

     Twelve Months Ended May 31,

 
     2004

    2003

 

Cash flows from operating activities:

                

Net income

   $ 62,443     $ 53,300  

Non-cash items

                

Restructuring and other charges

     4,437       —    

Depreciation and amortization

     35,540       32,061  

Deferred income taxes

     (1,737 )     10,968  

Minority interest in earnings

     8,985       5,008  

Other, net

     9,778       13,848  

Changes in working capital, which provided (used) cash

                

Settlement processing, net

     (36,342 )     (89,348 )

Other, net

     9,066       3,340  
    


 


Net cash provided by operating activities

     92,170       29,177  
    


 


Cash flows from investing activities:

                

Capital expenditures

     (24,564 )     (17,926 )

Net business development activities

     (122,276 )     (1,153 )
    


 


Net cash used in investing activities

     (146,840 )     (19,079 )
    


 


Cash flows from financing activities:

                

Net borrowings on (repayments of) line of credit

     122,000       (22,000 )

Net borrowings on line of credit with related party and restricted for merchant funding

     49,209       33,900  

Principal payments on notes payable issued in consideration of acquisition

     (114,229 )     —    

Principal payments under capital leases and other long-term debt

     (2,853 )     (2,603 )

Net stock issued to employees under stock plans and dividends paid

     5,433       47  

Distributions to minority interests

     (9,447 )     (7,008 )
    


 


Net cash provided by financing activities

     50,113       2,336  
    


 


Effect of exchange rate changes on cash

     1,019       6,382  
    


 


(Decrease) Increase in cash and cash equivalents

     (3,538 )     18,816  

Cash and cash equivalents, beginning of period

     38,010       19,194  
    


 


Cash and cash equivalents, end of period

   $ 34,472     $ 38,010  
    


 


 


UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

 

GLOBAL PAYMENTS INC. AND SUBSIDIARIES

 

(In thousands, except per share data)

 

Three Months Ending May 31,    2004

    2003

 
     Normalized

    Restructuring
and Other(1)


    GAAP

    Normalized

    Restructuring(2)

    GAAP

 

Revenue

   $ 181,848     $ —       $ 181,848     $ 134,322     $ —       $ 134,322  
    


 


 


 


 


 


Operating expenses:

                                                

Cost of service

     88,144       —         88,144       66,327       —         66,327  

Sales, general and administrative

     59,575       —         59,575       44,328       —         44,328  

Restructuring

     —         4,945       4,945       —         1,257       1,257  
    


 


 


 


 


 


       147,719       4,945       152,664       110,655       1,257       111,912  
    


 


 


 


 


 


Operating income

     34,129       (4,945 )     29,184       23,667       (1,257 )     22,410  
    


 


 


 


 


 


Other income/(expense)

                                                

Interest and other income

     556       583       1,139       451       —         451  

Interest and other expense

     (2,553 )     —         (2,553 )     (917 )     —         (917 )

Minority interest in earnings

     (3,421 )     —         (3,421 )     (1,165 )     —         (1,165 )
    


 


 


 


 


 


       (5,418 )     583       (4,835 )     (1,631 )     —         (1,631 )
    


 


 


 


 


 


Income before income taxes

     28,711       (4,362 )     24,349       22,036       (1,257 )     20,779  

Provision for income taxes

     10,738       (1,632 )     9,106       8,241       (470 )     7,771  
    


 


 


 


 


 


Net income

   $ 17,973     $ (2,730 )   $ 15,243     $ 13,795     $ (787 )   $ 13,008  
    


 


 


 


 


 


Basic shares

     37,800       —         37,800       37,085       —         37,085  

Basic earnings per share

   $ 0.48     $ (0.08 )   $ 0.40     $ 0.37     $ (0.02 )   $ 0.35  
    


 


 


 


 


 


Diluted shares

     39,320       —         39,320       37,986       —         37,986  

Diluted earnings per share

   $ 0.46     $ (0.07 )   $ 0.39     $ 0.36     $ (0.02 )   $ 0.34  
    


 


 


 


 


 



(1) Primarily relating to one-time employee benefits due to redundant activities and a gain on sale of investment, as well as the related income tax impact using the company’s effective tax rate.
(2) 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.


UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

 

GLOBAL PAYMENTS INC. AND SUBSIDIARIES

 

(In thousands, except per share data)

 

Twelve Months Ending May 31,    2004

    2003

 
     Normalized

    Restructuring
and Other(1)


    GAAP

    Normalized

    Restructuring(2)

    GAAP

 
                 (Audited)                 (Audited)  

Revenue

   $ 629,320     $ —       $ 629,320     $ 516,084     $ —       $ 516,084  
    


 


 


 


 


 


Operating expenses:

                                                

Cost of service

     289,353       —         289,353       260,290       —         260,290  

Sales, general and administrative

     217,418       —         217,418       161,272       —         161,272  

Restructuring

     —         9,648       9,648       —         1,257       1,257  
    


 


 


 


 


 


       506,771       9,648       516,419       421,562       1,257       422,819  
    


 


 


 


 


 


Operating income

     122,549       (9,648 )     112,901       94,522       (1,257 )     93,265  
    


 


 


 


 


 


Other income/(expense)

                                                

Interest and other income

     1,775       583       2,358       1,183       —         1,183  

Interest and other expense

     (6,525 )     —         (6,525 )     (4,296 )     —         (4,296 )

Minority interest in earnings

     (8,985 )     —         (8,985 )     (5,008 )     —         (5,008 )
    


 


 


 


 


 


       (13,735 )     583       (13,152 )     (8,121 )     —         (8,121 )
    


 


 


 


 


 


Income before income taxes

     108,814       (9,065 )     99,749       86,401       (1,257 )     85,144  

Provision for income taxes

     40,696       (3,390 )     37,306       32,315       (471 )     31,844  
    


 


 


 


 


 


Net income

   $ 68,118     $ (5,675 )   $ 62,443     $ 54,086     $ (786 )   $ 53,300  
    


 


 


 


 


 


Basic shares

     37,533       —         37,533       36,957       —         36,957  

Basic earnings per share

   $ 1.81     $ (0.15 )   $ 1.66     $ 1.46     $ (0.02 )   $ 1.44  
    


 


 


 


 


 


Diluted shares

     38,955       —         38,955       37,824       —         37,824  

Diluted earnings per share

   $ 1.75     $ (0.15 )   $ 1.60     $ 1.43     $ (0.02 )   $ 1.41  
    


 


 


 


 


 



(1) Relating to one-time employee termination benefits, facility-related charges due to redundant activities and facility closures, and a gain on sale of investment, as well as the related income tax impact using the company’s effective tax rate.
(2) 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.