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 First Quarter Earnings
ATLANTA, September 22, 2004 — Global Payments Inc. (NYSE: GPN) today announced results for the first quarter ended August 31, 2004. For the first quarter, revenue grew 41 percent to $192.6 million compared to $136.5 million in the prior year. This includes $31.1 million in revenue recorded in the current quarter as a result of the company’s DolEx and MUZO acquisitions, which were completed during the 2004 fiscal year. Net income grew 53 percent to $24.2 million compared to $15.8 million in the prior year quarter, and diluted earnings per share grew 51 percent to $0.62 compared to $0.41 in the prior year quarter. Excluding a prior year restructuring charge of $1.6 million, net income grew 44 percent from $16.8 million last year, and diluted earnings per share grew 41 percent from $0.44 last year.
Comments and Outlook
Chairman, President and CEO, Paul R. Garcia, stated, “We are very pleased with our strong financial results for the quarter. I am particularly pleased with the performance of our DolEx and MUZO channels, in addition to the strong growth in our core domestic direct channel as driven by solid transaction growth and a continued increase in pricing spreads. Finally, we continue to gain operating leverage through greater economies of scale and the benefit from last year’s consolidation of certain operating functions. As a result, we are raising our annual revenue guidance from our previous range of $722 million to $743 million to our revised range of $737 million to $758 million versus $629 million in fiscal 2004, a growth of 17 percent to 21 percent. In addition, we are raising our fiscal 2005 annual diluted earnings per share guidance from our previous range of $1.96 to $2.05 to our revised range of $2.10 to $2.19 for growth of 20 percent to 25 percent versus diluted earnings per share of $1.75 in fiscal 2004, excluding restructuring and other items ($1.60 in fiscal 2004 on a GAAP basis).” 1
Conference Call
Global Payments will hold a conference call on September 23, 2004 at 10:30 a.m. EDT to discuss financial results and business highlights. The conference call can be accessed by calling
—More—
GPN Reports First Quarter Fiscal 2005 Earnings
September 22, 2004
Page 2
1-888-455-3614 (U.S.) or 1-517-308-9007 (internationally) and using a pass code of “GPN” for both numbers, or via Web cast at www.globalpaymentsinc.com. A replay of the call will be available on the Global Payments Web site through October 7, 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, electronic check conversion and 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.
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.
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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 recently filed Form 10-Q or Form 10-K, as applicable. 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, |
||||||||
| 2004 |
2003 |
|||||||
| Revenues |
$ | 192,591 | $ | 136,464 | ||||
| Operating expenses: |
||||||||
| Cost of service |
80,440 | 62,162 | ||||||
| Sales, general and administrative |
70,537 | 45,541 | ||||||
| Restructuring and other |
— | 1,580 | ||||||
| 150,977 | 109,283 | |||||||
| Operating income |
41,614 | 27,181 | ||||||
| Other income (expense): |
||||||||
| Interest and other income |
319 | 324 | ||||||
| Interest and other expense |
(1,642 | ) | (575 | ) | ||||
| Minority interest |
(1,881 | ) | (1,650 | ) | ||||
| (3,204 | ) | (1,901 | ) | |||||
| Income before income taxes |
38,410 | 25,280 | ||||||
| Provision for income taxes |
14,212 | 9,455 | ||||||
| Net income |
$ | 24,198 | $ | 15,825 | ||||
| Earnings per share: |
||||||||
| Basic |
$ | 0.63 | $ | 0.43 | ||||
| Diluted |
$ | 0.62 | $ | 0.41 | ||||
| Weighted average shares outstanding: |
||||||||
| Basic |
38,162 | 37,145 | ||||||
| Diluted |
39,220 | 38,310 | ||||||
CONSOLIDATED CONDENSED BALANCE SHEETS
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
| (In thousands) |
||||||
| August 31, 2004 |
May 31, 2004 | |||||
| (Unaudited) | ||||||
| Assets |
||||||
| Cash and cash equivalents |
$ | 23,319 | $ | 34,472 | ||
| Accounts receivable, net |
53,470 | 47,414 | ||||
| Claims receivable, net |
865 | 761 | ||||
| Settlement processing receivable, net |
105,656 | 95,233 | ||||
| Other current assets |
25,883 | 25,324 | ||||
| Current assets |
209,193 | 203,204 | ||||
| Property and equipment, net |
99,513 | 97,482 | ||||
| Goodwill |
346,570 | 342,012 | ||||
| Intangible assets, net |
181,661 | 182,658 | ||||
| Other assets |
6,584 | 7,539 | ||||
| Total assets |
$ | 843,521 | $ | 832,895 | ||
| Liabilities & Shareholders’ Equity |
||||||
| Line of credit |
$ | 110,000 | $ | 122,000 | ||
| Line of credit with related party |
73,259 | 83,109 | ||||
| Notes payable-current portion |
3,336 | 3,409 | ||||
| Accounts payable and other accrued liabilities |
87,546 | 79,773 | ||||
| Obligations under capital leases |
1,220 | 1,190 | ||||
| Current liabilities |
275,361 | 289,481 | ||||
| Notes payable |
1,755 | 7,477 | ||||
| Obligations under capital leases |
1,745 | 2,061 | ||||
| Other accrued liabilities |
62,672 | 61,324 | ||||
| Total liabilities |
341,533 | 360,343 | ||||
| Minority interest in equity of subsidiaries |
17,482 | 23,130 | ||||
| Shareholders’ equity |
484,506 | 449,422 | ||||
| Total liabilities & shareholders’ equity |
$ | 843,521 | $ | 832,895 | ||
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
| (In thousands) |
||||||||
| Three Months Ended August 31, |
||||||||
| 2004 |
2003 |
|||||||
| Cash flows from operating activities: |
||||||||
| Net income |
$ | 24,198 | $ | 15,825 | ||||
| Non-cash items |
||||||||
| Depreciation and amortization |
10,668 | 7,519 | ||||||
| Minority interest in earnings |
1,881 | 1,650 | ||||||
| Other, net |
1,925 | 1,454 | ||||||
| Changes in working capital, which provided (used) cash |
||||||||
| Settlement processing |
(12,031 | ) | 5,570 | |||||
| Other, net |
3,763 | 8,875 | ||||||
| Net cash provided by operating activities |
30,404 | 40,893 | ||||||
| Cash flows from investing activities: |
||||||||
| Capital expenditures |
(8,801 | ) | (3,128 | ) | ||||
| Net business development activities |
(7,830 | ) | — | |||||
| Net cash used in investing activities |
(16,631 | ) | (3,128 | ) | ||||
| Cash flows from financing activities: |
||||||||
| Net repayments on line of credit |
(12,000 | ) | — | |||||
| Net (repayments) borrowings on line of credit restricted for merchant funding |
(9,850 | ) | 23,973 | |||||
| Principal payments under capital leases and other notes |
(6,081 | ) | (542 | ) | ||||
| Net stock issued to employees under stock plans and dividends |
4,044 | (3 | ) | |||||
| Distributions to minority interests |
(2,785 | ) | (1,962 | ) | ||||
| Net cash (used in) provided by financing activities |
(26,672 | ) | 21,466 | |||||
| Effect of exchange rate changes on cash |
1,746 | (1,121 | ) | |||||
| (Decrease) Increase in cash and cash equivalents |
(11,153 | ) | 58,110 | |||||
| Cash and cash equivalents, beginning of period |
34,472 | 38,010 | ||||||
| Cash and cash equivalents, end of period |
$ | 23,319 | $ | 96,120 | ||||
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
| (In thousands, except per share data) |
||||||||||||||||
| Three Months Ending August 31, | 2004 |
2003 |
||||||||||||||
| GAAP |
Normalized |
Restructuring(1) |
GAAP |
|||||||||||||
| Revenue |
$ | 192,591 | $ | 136,464 | $ | — | $ | 136,464 | ||||||||
| Operating expenses: |
||||||||||||||||
| Cost of service |
80,440 | 62,162 | — | 62,162 | ||||||||||||
| Sales, general and administrative |
70,537 | 45,541 | — | 45,541 | ||||||||||||
| Restructuring |
— | — | 1,580 | 1,580 | ||||||||||||
| 150,977 | 107,703 | 1,580 | 109,283 | |||||||||||||
| Operating income |
41,614 | 28,761 | (1,580 | ) | 27,181 | |||||||||||
| Other income/(expense) |
||||||||||||||||
| Interest and other income |
319 | 324 | — | 324 | ||||||||||||
| Interest and other expense |
(1,642 | ) | (575 | ) | — | (575 | ) | |||||||||
| Minority interest in earnings |
(1,881 | ) | (1,650 | ) | — | (1,650 | ) | |||||||||
| (3,204 | ) | (1,901 | ) | — | (1,901 | ) | ||||||||||
| Income before income taxes |
38,410 | 26,860 | (1,580 | ) | 25,280 | |||||||||||
| Provision for income taxes |
14,212 | 10,046 | (591 | ) | 9,455 | |||||||||||
| Net income |
$ | 24,198 | $ | 16,814 | $ | (989 | ) | $ | 15,825 | |||||||
| Basic shares |
38,162 | 37,145 | — | 37,145 | ||||||||||||
| Basic earnings per share |
$ | 0.63 | $ | 0.45 | $ | (0.02 | ) | $ | 0.43 | |||||||
| Diluted shares |
39,220 | 38,310 | — | 38,310 | ||||||||||||
| Diluted earnings per share |
$ | 0.62 | $ | 0.44 | $ | (0.03 | ) | $ | 0.41 | |||||||
| (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. |