Exhibit 99.1 GLOBAL PAYMENTS REPORTS FIRST QUARTER EARNINGS ATLANTA, Sept. 29 /PRNewswire-FirstCall/ -- Global Payments Inc. (NYSE: GPN) today announced results for its first quarter ended August 31, 2006. For the first quarter, revenue grew 16 percent to $260.3 million compared to $224.5 million in the prior year. Excluding the impact of current period stock option expense and prior year restructuring charges, net income grew 41 percent to $44.2 million compared to $31.3 million in the prior year quarter, and diluted earnings per share grew 38 percent to $0.54 compared to $0.39 in the prior year quarter. (Logo: http://www.newscom.com/cgi-bin/prnh/20010221/ATW031LOGO) In accordance with GAAP, prior period net income and diluted earnings per share include certain restructuring charges (see attached reconciliation schedule) relating to an operating center consolidation, which was announced in July 2005. These charges consisted of employee termination benefits. Additionally, the current fiscal quarter includes the recognition of stock option expenses as a result of the company's June 1, 2006 adoption of Statement of Financial Accounting Standards No. 123(R) using the modified prospective method. First quarter fiscal 2007 GAAP net income and diluted earnings per share were $41.5 million and $0.51, respectively, compared to $30.7 million and $0.38, respectively, in the prior year quarter. Comments and Outlook Chairman, President and CEO, Paul R. Garcia, stated, "We are very pleased with our first quarter fiscal 2007 financial results, which were driven primarily by strong revenue and operating margin growth in our merchant services segment. Our domestic ISO channel remains one of the fastest growing areas of the company, with outstanding expansion in the quarter. We are also delighted with the progress made in our new HSBC joint venture and continue to move forward with our sales strategy to take advantage of the strong growth opportunities present in the Asia-Pacific region. We also remain very pleased with our money transfer segment, which achieved solid revenue growth of 18% during the quarter. Based on our overall strong results, we are raising the low end of our annual fiscal 2007 revenue guidance to $1,057 million, and reaffirming the high end of this guidance of $1,084 million. This revenue guidance reflects an expected 16 percent to 19 percent growth versus $908 million in fiscal 2006. In addition, we are raising our annual fiscal 2007 diluted earnings per share guidance to a range of $1.79 to $1.85, excluding the impact of stock option expenses as a result of our adoption of FAS 123R, for an expected growth of 16 percent to 20 percent versus $1.54 in fiscal 2006." (1) Including the impact of these stock option expenses, our annual fiscal 2007 diluted earnings per share guidance is $1.69 to $1.75. Conference Call Global Payments will hold a conference call today, September 29, 2006 at 10:30 a.m. ET to discuss financial results and business highlights. The conference call may be accessed by calling 1-888-791-2132 (U.S.) or 1-517-623-4000 (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 13, 2006. 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, Europe and the Asia-Pacific. 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 and the Philippines. For more information about the company and its services, visit www.globalpaymentsinc.com. (1) Fiscal 2006 diluted earnings per share was $1.53 on a GAAP basis, which includes restructuring charges equivalent to $0.01 in 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 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. Contact: Jane M. Elliott 770-829-8234 Voice 770-829-8267 Fax investor.relations@globalpay.com UNAUDITED CONSOLIDATED STATEMENTS OF INCOME GLOBAL PAYMENTS INC. AND SUBSIDIARIES (In thousands, except per share data) Three Months Ended August 31, ----------------------------- 2006 2005 ------------- ------------- Revenues $ 260,308 $ 224,456 Operating expenses: Cost of service 98,190 93,183 Sales, general and administrative 98,591 79,876 Restructuring - 873 196,781 173,932 Operating income 63,527 50,524 Other income (expense): Interest and other income 3,596 914 Interest and other expense (2,162) (1,520) 1,434 (606) Income before income taxes and minority interest 64,961 49,918 Provision for income taxes (20,909) (17,022) Minority interest, net of tax (2,543) (2,158) Net income $ 41,509 $ 30,738 Earnings per share: Basic $ 0.52 $ 0.39(1) Diluted $ 0.51 $ 0.38(1) Weighted average shares outstanding: Basic 79,734 78,024(1) Diluted 81,576 81,014(1) (1) All share and per share amounts reflect the retroactive effect of the company's two-for-one stock split, which was completed through a stock dividend that was distributed on October 28, 2005. CONSOLIDATED CONDENSED BALANCE SHEETS GLOBAL PAYMENTS INC. AND SUBSIDIARIES (In thousands) August 31, May 31, 2006 2006 ----------- ----------- (Unaudited) Assets Cash and cash equivalents $ 168,578 $ 218,475 Accounts receivable, net 76,157 67,476 Claims receivable, net 1,592 903 Settlement processing assets 37,979 39,671 Other current assets 28,524 21,881 Current assets 312,830 348,406 Property and equipment, net 109,396 107,977 Goodwill 434,198 387,280 Other intangible assets, net 182,234 167,182 Other assets 12,362 7,833 Total assets $ 1,051,020 $ 1,018,678 Liabilities and Shareholders' Equity Lines of credit $ 49 $ - Settlement processing obligations 29,406 37,942 Payable to money transfer beneficiaries 5,828 6,361 Accounts payable and other accrued liabilities 96,649 104,606 Obligations under capital leases- current portion 397 746 Current liabilities 132,329 149,655 Other long-term liabilities 82,481 85,804 Total liabilities 214,810 235,459 Minority interest in equity of subsidiaries 15,320 12,996 Shareholders' equity 820,890 770,223 Total liabilities and shareholders' equity $ 1,051,020 $ 1,018,678 UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW GLOBAL PAYMENTS INC. AND SUBSIDIARIES (In thousands) Three Months Ended August 31, ----------------------------- 2006 2005 ------------ ------------ Cash flows from operating activities: Net income $ 41,509 $ 30,738 Non-cash items Depreciation and amortization 9,805 10,396 Minority interest in earnings 2,651 2,158 Other, net 9,554 8,368 Changes in working capital, which (used) provided cash Settlement processing (7,572) 14,597 Other, net (33,587) (12,198) Net cash provided by operating activities 22,360 54,059 Cash flows from investing activities: Capital expenditures (6,929) (5,206) Business acquisitions, net of cash acquired (67,195) (480) Net cash used in investing activities (74,124) (5,686) Cash flows from financing activities: Net borrowings (payments) on line of credit 49 (57,673) Principal payments under capital leases and other notes (349) (1,012) Net stock issued to employees under stock plans and dividends 5,585 (1,016) Distributions to minority interests (2,530) (2,818) Net cash provided by (used in) financing activities 2,755 (62,519) Effect of exchange rate changes on cash (888) 621 Decrease in cash and cash equivalents (49,897) (13,525) Cash and cash equivalents, beginning of period 218,475 48,979 Cash and cash equivalents, end of period $ 168,578 $ 35,454 UNAUDITED CONSOLIDATED STATEMENTS OF INCOME GLOBAL PAYMENTS INC. AND SUBSIDIARIES Reconciliation to Exclude Restructuring and Stock Option Expenses from Normalized Results (In thousands, except per share data)
Three Months Ended August 31, -------------------------------------------------------------------------------------- 2006 2005 ----------------------------------------- ----------------------------------------- Stock Restruct- Normalized Options(1) GAAP Normalized uring(2) GAAP ----------- ----------- ----------- ----------- ----------- ----------- Revenue $ 260,308 $ - $ 260,308 $ 224,456 $ - $ 224,456 Operating expenses: Cost of service 98,190 - 98,190 93,183 - 93,183 Sales, general and administrative 94,588 4,003 98,591 79,876 - 79,876 Restructuring - - - - 873 873 192,778 4,003 196,781 173,059 873 173,932 Operating income 67,530 (4,003) 63,527 51,397 (873) 50,524 Other income/(expense) Interest and other income 3,596 - 3,596 914 - 914 Interest and other expense (2,162) - (2,162) (1,520) - (1,520) 1,434 - 1,434 (606) - (606) Income before income taxes 68,964 (4,003) 64,961 50,791 (873) 49,918 Provision for income taxes (22,198) 1,289 (20,909) (17,320) 298 (17,022) Minority interest, net of tax (2,543) - (2,543) (2,158) - (2,158) Net income $ 44,223 $ (2,714) $ 41,509 $ 31,313 $ (575) $ 30,738 Basic shares 79,734 - 79,734 78,024 - 78,024 Basic earnings per share $ 0.55 $ (0.03) $ 0.52 $ 0.40 $ (0.01) $ 0.39 Diluted shares 81,576 - 81,576 81,014 - 81,014 Diluted earnings per share $ 0.54 $ (0.03) $ 0.51 $ 0.39 $ (0.01) $ 0.38
(1) Relates to the company's adoption of SFAS 123(R) on June 1, 2006, which requires the recognition of compensation expense resulting from employee stock options. Also reflects the related income tax benefit using the company's effective tax rate, which is defined as the provision for income taxes divided by income before income taxes and minority interest. (2) Restructuring amount consists of employee termination benefits relating to an operating center consolidation. Also reflects the related income tax benefit using the company's effective tax rate, as described above. SEGMENT INFORMATION GLOBAL PAYMENTS INC. AND SUBSIDIARIES (In thousands) Three Months Ended August 31, ------------------------------ 2006 2005 ------------- ------------- Revenues Domestic direct $ 135,442 $ 115,265 Canada 60,918 54,278 Central and Eastern Europe 13,275 12,727 Asia-Pacific 5,486 - Domestic indirect and other(1) 12,195 14,168 Merchant services(1) 227,316 196,438 Domestic 29,302 25,701 Europe 3,690 2,317 Money transfer(1) 32,992 28,018 Total revenues $ 260,308 $ 224,456 Operating income Merchant services $ 72,961 $ 56,248 Money transfer 4,679 4,579 Corporate(2) (14,113) (9,430) Restructuring - (873) Operating income $ 63,527 $ 50,524 (1) Prior to fiscal 2006, the company's legacy funds transfer revenue was historically reported in "Money transfer". Beginning in the fourth quarter of fiscal 2006, such revenues were reclassified to "Merchant services" under the "Domestic indirect and other" category. All prior period amounts were reclassified for this change. With this change, the company's "Money transfer" segment only includes its consumer money transfer service offerings. (2) Fiscal 2007 includes compensation expense resulting from employee stock options as a result of our adoption of FAS 123R. Fiscal 2006 does not include these expenses. SOURCE Global Payments Inc. -0- 09/29/2006 /CONTACT: Jane M. Elliott of Global Payments Inc., +1-770-829-8234, Fax, +1-770-829-8267, or investor.relations@globalpay.com/ /Photo: NewsCom: http://www.newscom.com/cgi-bin/prnh/20010221/ATW031LOGO AP Archive: http://photoarchive.ap.org PRN Photo Desk, photodesk@prnewswire.com/ /Web site: http://www.globalpaymentsinc.com/