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 Third Quarter Earnings
ATLANTA, March 21, 2005 — Global Payments Inc. (NYSE: GPN) today announced results for the third quarter ended February 28, 2005. For the third quarter, revenue grew 20 percent to $195.5 million compared to $162.6 million in the prior year. This includes $14.5 million in revenue recorded in the current quarter from the company’s recent acquisitions of MUZO and Europhil. Net income grew 31 percent to $21.6 million compared to $16.5 million in the prior year quarter, and diluted earnings per share grew 29 percent to $0.54 compared to $0.42 in the prior year quarter.
For the nine months ending February 28, 2005, revenue grew 29 percent to $576.7 million compared to $447.5 million in the prior year period. Net income grew 47 percent to $69.4 million from $47.2 million in the prior period, and diluted earnings per share grew 43 percent to $1.75 from $1.22 in the prior year period. Excluding prior year restructuring charges of $4.7 million, net income grew 38 percent from $50.1 million last year, and diluted earnings per share grew 36 percent from $1.29 last year.
Comments and Outlook
Chairman, President and CEO, Paul R. Garcia, stated, “We are pleased to report another quarter of strong financial results, which were primarily driven by higher than anticipated growth from our Central and Eastern European operations and from our consumer money transfer channel. In addition, our core domestic direct channel outpaced our expectations, largely due to strong growth from our ISOs. Our Canadian direct channel also benefited from a higher than anticipated impact of re-pricing initiatives and the Canadian currency exchange rate. Additionally, we continue to gain operating leverage through greater economies of scale and the benefit from last year’s consolidation of certain operating functions. Based on our financial results, we are raising our fiscal 2005 annual revenue guidance to a range of $774 million to $781 million and our fiscal 2005 annual diluted earnings per share guidance to a range of
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GPN Reports Third Quarter Fiscal 2005 Earnings
March 21, 2005
Page 2
$2.31 to $2.35 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 March 22, 2005 at 10:30 a.m. EST to discuss financial results and business highlights. The conference call may be accessed by calling 1-888-220-3084 (U.S.) or 1-712-923-4284 (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 April 5, 2005.
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, verification and recovery including electronic check services, as well as terminal management. The company also provides consumer money transfer services from the U.S. and Europe to destinations in Latin America, Morocco, the Philippines and India. 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 10K, 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 February 28/29, |
||||||||
| 2005 |
2004 |
|||||||
| Revenues |
$ | 195,526 | $ | 162,560 | ||||
| Operating expenses: |
||||||||
| Cost of service |
87,378 | 71,773 | ||||||
| Sales, general and administrative |
69,929 | 60,355 | ||||||
| 157,307 | 132,128 | |||||||
| Operating income |
38,219 | 30,432 | ||||||
| Other income (expense): |
||||||||
| Interest and other income |
793 | 466 | ||||||
| Interest and other expense |
(2,969 | ) | (2,337 | ) | ||||
| Minority interest |
(1,720 | ) | (2,198 | ) | ||||
| (3,896 | ) | (4,069 | ) | |||||
| Income before income taxes |
34,323 | 26,363 | ||||||
| Provision for income taxes |
12,700 | 9,860 | ||||||
| Net income |
$ | 21,623 | $ | 16,503 | ||||
| Earnings per share: |
||||||||
| Basic |
$ | 0.56 | $ | 0.44 | ||||
| Diluted |
$ | 0.54 | $ | 0.42 | ||||
| Weighted average shares outstanding: |
||||||||
| Basic |
38,706 | 37,725 | ||||||
| Diluted |
40,103 | 39,329 | ||||||
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands, except per share data)
| Nine Months Ended February 28/29, |
||||||||
| 2005 |
2004 |
|||||||
| Revenues |
$ | 576,666 | $ | 447,471 | ||||
| Operating expenses: |
||||||||
| Cost of service |
247,168 | 201,209 | ||||||
| Sales, general and administrative |
208,887 | 157,842 | ||||||
| Restructuring and other |
— | 4,703 | ||||||
| 456,055 | 363,754 | |||||||
| Operating income |
120,611 | 83,717 | ||||||
| Other income (expense): |
||||||||
| Interest and other income |
1,509 | 1,219 | ||||||
| Interest and other expense |
(6,446 | ) | (3,972 | ) | ||||
| Minority interest |
(5,516 | ) | (5,564 | ) | ||||
| (10,453 | ) | (8,317 | ) | |||||
| Income before income taxes |
110,158 | 75,400 | ||||||
| Provision for income taxes |
40,759 | 28,200 | ||||||
| Net income |
$ | 69,399 | $ | 47,200 | ||||
| Earnings per share: |
||||||||
| Basic |
$ | 1.81 | $ | 1.26 | ||||
| Diluted |
$ | 1.75 | $ | 1.22 | ||||
| Weighted average shares outstanding: |
||||||||
| Basic |
38,448 | 37,444 | ||||||
| Diluted |
39,734 | 38,832 | ||||||
CONSOLIDATED CONDENSED BALANCE SHEETS
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands)
| February 28, 2005 |
May 31, 2004 | |||||
| (Unaudited) | ||||||
| Assets |
||||||
| Cash and cash equivalents |
$ | 58,202 | $ | 34,472 | ||
| Accounts receivable, net |
48,739 | 47,414 | ||||
| Claims receivable, net |
647 | 761 | ||||
| Settlement processing receivable, net |
34,508 | 95,233 | ||||
| Other current assets |
19,673 | 25,324 | ||||
| Current assets |
161,769 | 203,204 | ||||
| Property and equipment, net |
107,549 | 97,482 | ||||
| Goodwill |
372,399 | 342,012 | ||||
| Intangible assets, net |
179,452 | 182,658 | ||||
| Other assets |
6,122 | 7,539 | ||||
| Total assets |
$ | 827,291 | $ | 832,895 | ||
| Liabilities & Shareholders’ Equity |
||||||
| Line of credit |
$ | 85,600 | $ | 122,000 | ||
| Line of credit with related party |
10,343 | 83,109 | ||||
| Notes payable-current portion |
2,066 | 3,409 | ||||
| Accounts payable and other accrued liabilities |
87,707 | 79,773 | ||||
| Obligations under capital leases—current portion |
1,282 | 1,190 | ||||
| Current liabilities |
186,998 | 289,481 | ||||
| Notes payable |
— | 7,477 | ||||
| Obligations under capital leases |
1,087 | 2,061 | ||||
| Other accrued liabilities |
67,443 | 61,324 | ||||
| Total liabilities |
255,528 | 360,343 | ||||
| Minority interest in equity of subsidiaries |
16,395 | 23,130 | ||||
| Shareholders’ equity |
555,368 | 449,422 | ||||
| Total liabilities & shareholders’ equity |
$ | 827,291 | $ | 832,895 | ||
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands)
| Nine Months Ended February 28/29, |
||||||||
| 2005 |
2004 |
|||||||
| Cash flows from operating activities: |
||||||||
| Net income |
$ | 69,399 | $ | 47,200 | ||||
| Non-cash items |
||||||||
| Depreciation and amortization |
33,394 | 25,101 | ||||||
| Deferred income taxes |
(2,946 | ) | — | |||||
| Minority interest in earnings |
5,516 | 5,564 | ||||||
| Other, net |
6,788 | 6,227 | ||||||
| Changes in working capital, which provided (used) cash |
||||||||
| Settlement processing |
55,571 | (17,885 | ) | |||||
| Other, net |
20,305 | 2,600 | ||||||
| Net cash provided by operating activities |
188,027 | 68,807 | ||||||
| Cash flows from investing activities: |
||||||||
| Capital expenditures |
(27,639 | ) | (15,042 | ) | ||||
| Net business development activities |
(30,490 | ) | (94,965 | ) | ||||
| Net cash used in investing activities |
(58,129 | ) | (110,007 | ) | ||||
| Cash flows from financing activities: |
||||||||
| Net (repayments) borrowings on line of credit |
(36,400 | ) | 161,000 | |||||
| Net (repayments) borrowings on line of credit restricted for merchant funding |
(72,766 | ) | 48,801 | |||||
| Principal payments on notes payable issued in consideration of acquisition |
— | (114,229 | ) | |||||
| Principal payments under capital leases and other notes |
(9,755 | ) | (1,465 | ) | ||||
| Net stock issued to employees under stock plans and dividends |
13,350 | 164 | ||||||
| Distributions to minority interests |
(7,507 | ) | (6,674 | ) | ||||
| Net cash (used in) provided by financing activities |
(113,078 | ) | 87,597 | |||||
| Effect of exchange rate changes on cash |
6,910 | 1,483 | ||||||
| Increase in cash and cash equivalents |
23,730 | 47,880 | ||||||
| Cash and cash equivalents, beginning of period |
34,472 | 38,010 | ||||||
| Cash and cash equivalents, end of period |
$ | 58,202 | $ | 85,890 | ||||
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands, except per share data)
| 2005 |
2004 |
|||||||||||||||
| Nine Months Ending February 28/29,
|
GAAP |
Normalized |
Restructuring(1) |
GAAP |
||||||||||||
| Revenue |
$ | 576,666 | $ | 447,471 | $ | — | $ | 447,471 | ||||||||
| Operating expenses: |
||||||||||||||||
| Cost of service |
247,168 | 201,209 | — | 201,209 | ||||||||||||
| Sales, general and administrative |
208,887 | 157,842 | — | 157,842 | ||||||||||||
| Restructuring |
— | — | 4,703 | 4,703 | ||||||||||||
| 456,055 | 359,051 | 4,703 | 363,754 | |||||||||||||
| Operating income |
120,611 | 88,420 | (4,703 | ) | 83,717 | |||||||||||
| Other income/(expense) |
||||||||||||||||
| Interest and other income |
1,509 | 1,219 | — | 1,219 | ||||||||||||
| Interest and other expense |
(6,446 | ) | (3,972 | ) | — | (3,972 | ) | |||||||||
| Minority interest in earnings |
(5,516 | ) | (5,564 | ) | — | (5,564 | ) | |||||||||
| (10,453 | ) | (8,317 | ) | — | (8,317 | ) | ||||||||||
| Income before income taxes |
110,158 | 80,103 | (4,703 | ) | 75,400 | |||||||||||
| Provision for income taxes |
40,759 | 29,959 | (1,759 | ) | 28,200 | |||||||||||
| Net income |
$ | 69,399 | $ | 50,144 | $ | (2,944 | ) | $ | 47,200 | |||||||
| Basic shares |
38,448 | 37,444 | — | 37,444 | ||||||||||||
| Basic earnings per share |
$ | 1.81 | $ | 1.34 | $ | (0.08 | ) | $ | 1.26 | |||||||
| Diluted shares |
39,734 | 38,832 | — | 38,832 | ||||||||||||
| Diluted earnings per share |
$ | 1.75 | $ | 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. |