EX-99.1 2 dex991.txt PRESS RELEASE DATED JULY 18, 2001 EXHIBIT 99.1 For Immediate Release Contact: Betty Feezor 404-728-3204 Voice 404-728-3417 Fax investor.relations@globalpay.com -------------------------------- GLOBAL PAYMENTS ANNOUNCES FOURTH QUARTER AND YEAR END RESULTS FOR FISCAL 2001 ATLANTA, July 18, 2001 --- Global Payments Inc. (NYSE: GPN) today announced results for the fourth quarter and fiscal year ended May 31, 2001. These results are stated on a normalized basis, which excludes the impact of divested businesses and other non-recurring items, and includes certain pro forma costs assuming its spin off from National Data Corporation occurred on June 1, 1999. For the fourth quarter, normalized revenue grew by 25% to $102.7 million, net income was $8.7 million, and diluted earnings per share was $0.25. These results compare to prior year same period normalized revenue of $81.9 million, net income of $6.6 million, and diluted earnings per share of $0.25. For the fiscal year, normalized revenue grew by 7% to $350.3 million, net income was $30.9 million, and diluted earnings per share was $1.06. These results compare to prior year normalized revenue of $327.2 million, net income of $30.2 million, and diluted earnings per share of $1.13. The year-over-year normalized results reflect 8% revenue growth from the Merchant Services channel offset by declines in the Funds Transfer channel. Global continues to be a strong generator of cash, with normalized EBITDA of $82.5 million for the year. For the fiscal year on a GAAP reported basis, revenue was $353.2 million, net income was $23.7 million, and diluted earnings per share was $0.81. GAAP results for the fourth quarter of fiscal 2001 include a restructuring charge of $4.9 million relating to facilities consolidation and severance ($2.2 million of which is non-cash), a non-recurring reserve of $3.0 million involving a change in operating guidelines concerning aged chargebacks in our merchant settlement function, as well as a non-operating, non-cash loss of $5.0 million on the write down of Global's sole Internet-related investment. Global also issued 9.8 million shares of common stock to Commerce Imperial Bank of Canada in the fourth quarter in conjunction with its acquisition of CIBC's merchant acquiring business, resulting in a significant increase to shares outstanding. In commenting on the results, Paul R. Garcia, chief executive officer, said, "We have completed the most significant year in our thirty-four year history. We became an independently traded public company through the spin off from National Data Corporation. We have revamped our direct sales force, consolidated operations, expanded our ISO sales channel, and invested in our core infrastructure. "Additionally, we have significantly expanded our North American market presence through our acquisition of CIBC's VISA portfolio, which closed in March, and our pending acquisition of National Bank of Canada's MasterCard portfolio, planned to close this fall. Upon the completion of these acquisitions, we will become the largest publicly-traded, independent MasterCard and VISA acquirer in Canada with the capability to provide Canadian businesses one source for all of their VISA, MasterCard, debit, and other payment processing requirements. We also broadened our market penetration in the western United States through our acquisition of Imperial Bank's merchant portfolio. "We are well positioned for growth in fiscal 2002. We expect to achieve fiscal 2002 revenue of $455 to $462 million, reflecting growth of 30% to 32% over fiscal 2001 normalized results of $350.3 million. Our revenue growth will be driven by continued domestic and Canadian expansion in our Direct merchant acquiring channel. We expect to achieve fiscal 2002 basic earnings per share of $1.24 to $1.29, reflecting growth of 15% to 19% over fiscal 2001 normalized results of $1.08. On a diluted basis, we expect earnings per share of $1.19 to $1.24. These estimates include a $0.10 favorable impact expected to result from adoption of SFAS 142, "Goodwill and Other Intangible Assets", which no longer requires amortization of goodwill. "We believe that our expectation of 15% to 19% basic earnings per share growth reflects a significant improvement over our normalized basic earnings per share decline of 4% during fiscal 2001. Further, we expect continued growth in fiscal 2003, as we benefit from the integration of our recent acquisitions and continue to build momentum in our existing lines of business." Global Payments Inc. is a leading provider of electronic transaction processing services to merchants, Independent Sales Organizations (ISOs), financial institutions, government agencies and multi-national corporations located throughout the United States, Canada and the United Kingdom. Global Payments offers a comprehensive line of payment solutions, including credit and debit cards, business-to-business purchasing cards, gift cards, check guarantee, check verification and recovery, terminal management and funds transfer services. ### This document may contain forward-looking statements concerning the Company's operations, current and future performance and financial condition. These items involve risks and uncertainties such as product demand, market and customer acceptance, the effect of economic conditions, competition, pricing, development difficulties, the ability to consummate and integrate acquisitions, and other risks detailed in the Company's SEC filings, including the most recent Form 10. The Company undertakes no obligation to revise any of these statements to reflect future circumstances or the occurrence of unanticipated events. Normalized CONSOLIDATED STATEMENTS OF INCOME GLOBAL PAYMENTS INC. AND SUBSIDIARIES (In thousands, except per share data) --------------------------------------------------------------------------------
Three Months Ended May 31, ----------------------------------------------- 2001 2000 --------------------- ------------------------ Revenues $ 102,699 $ 81,914 ------------------------------------------------------------------------------------------------------------------------------------ Operating expenses: Cost of service 55,655 43,339 Sales, general and administrative 30,639 24,886 ----------------------------------------------- 86,294 68,225 ----------------------------------------------- Operating income 16,405 13,689 ------------------------------------------------------------------------------------------------------------------------------------ Other income (expense): Interest and other income 549 (361) Interest and other expense (1,356) (1,473) Minority interest (1,475) (1,092) ----------------------------------------------- (2,282) (2,926) ----------------------------------------------- Income before income taxes 14,123 10,763 Provision for income taxes 5,437 4,149 ------------------------------------------------------------------------------------------------------------------------------------ Net income $ 8,686 $ 6,614 =============================================== Basic earnings per share $ 0.25 $ 0.25 =============================================== Weighted average basic shares outstanding 34,339 26,204 =============================================== Diluted earnings per share ** $ 0.25 $ 0.25 =============================================== Weighted average diluted shares outstanding ** 35,224 26,384 ================================================
** -Diluted share and per share information is on a pro forma basis for fiscal 2000. Press Release Page 4 Normalized CONSOLIDATED STATEMENTS OF INCOME GLOBAL PAYMENTS INC. AND SUBSIDIARIES (In thousands, except per share data) --------------------------------------------------------------------------------
Year Ended May 31, ---------------------------- 2001 2000 ----------- -------------- Revenues $ 350,315 $ 327,183 -------------------------------------------------------------------------------- Operating expenses: Cost of service 187,121 174,038 Sales, general and administrative 102,480 93,985 ---------------------------- 289,601 268,023 ---------------------------- Operating income 60,714 59,160 -------------------------------------------------------------------------------- Other income (expense): Interest and other income 2,039 796 Interest and other expense (6,999) (6,752) Minority interest (5,430) (4,117) ---------------------------- (10,390) (10,073) ---------------------------- Income before income taxes 50,324 49,087 Provision for income taxes 19,375 18,921 -------------------------------------------------------------------------------- Net income $ 30,949 $ 30,166 ============================ Basic earnings per share $ 1.08 $ 1.13 ============================ Weighted average basic shares outstanding 28,616 26,586 ============================ Diluted earnings per share ** $ 1.06 $ 1.13 ============================ Weighted average diluted shares outstanding ** 29,134 26,793 ============================
** -Diluted share and per share information is on a pro forma basis. Press Release Page 5 Combined Statement of Income GLOBAL PAYMENTS INC. (in thousands) ================================================================================
Fourth Quarter Ending May 31, 2001 2000 ---------------------------------------------- --------------- Normalized One-Time GAAP GAAP ---------------------------------------------- --------------- Revenue $ 102,699 $ - $ 102,699 $ $ 84,204 Operating expenses: Cost of service 55,655 2,996 58,651 45,025 Sales, general and administrative 30,639 - 30,639 25,201 Restructuring and other - 4,882 4,882 - ---------------------------------------------- --------------- 86,294 7,878 94,172 70,226 ---------------------------------------------- --------------- Operating income 16,405 (7,878) 8,527 13,978 EBITDA 23,354 (7,878) 15,476 19,123 Other income/(expense) Interest and other income 549 - 549 (361) Non-cash loss on investment - (5,000) (5,000) - Interest and other expense (1,356) - (1,356) (1,314) Minority interest in earnings (1,475) - (1,475) (1,092) ---------------------------------------------- --------------- (2,282) (5,000) (7,282) (2,767) ---------------------------------------------- --------------- Income before income taxes 14,123 (12,878) 1,245 11,211 Income Taxes 5,437 (4,958) 479 4,321 ---------------------------------------------- --------------- Net Income 8,686 (7,920) 766 6,890 ============================================== =============== Basic Shares 34,339 - 34,339 26,204 Basic Earnings per Share $ 0.25 $ (0.23) $ 0.02 $ 0.26 ============================================== =============== Pro Forma Diluted Shares 35,224 - 35,224 26,384 Pro Forma Diluted Earnings per Share $ 0.25 $ (0.23) $ 0.02 $ 0.26 ============================================== ===============
Press Release Page 6 Combined Statement of Income GLOBAL PAYMENTS INC. (in thousands) --------------------------------------------------------------------------------
Fiscal Year Ending May 31, 2001 2000 ---------------------------------------------- --------------- Normalized One-Time GAAP GAAP ---------------------------------------------- --------------- Revenue $ 350,315 $ 2,880 $ 353,195 $ 340,033 Operating expenses: Cost of service 187,121 5,268 192,389 181,479 Sales, general and administrative 102,480 398 102,878 95,342 Restructuring and other - 4,882 4,882 - ---------------------------------------------- --------------- 289,601 10,548 300,149 276,821 ---------------------------------------------- --------------- Operating income 60,714 (7,668) 53,046 63,212 EBITDA 82,469 (7,667) 74,802 83,240 Other income/(expense) Interest and other income 2,039 - 2,039 796 Non-cash loss on investment - (5,000) (5,000) - Interest and other expense (6,999) 828 (6,171) (6,119) Minority interest in earnings (5,430) - (5,430) (4,117) ---------------------------------------------- --------------- (10,390) (4,172) (14,562) (9,440) ---------------------------------------------- --------------- Income before income taxes 50,324 (11,840) 38,484 53,772 Income Taxes 19,375 (4,559) 14,816 20,725 ---------------------------------------------- --------------- Net Income 30,949 (7,281) 23,668 33,047 ---------------------------------------------- --------------- Basic Shares 28,616 - 28,616 26,586 Basic Earnings per Share $ 1.08 $ (0.25) $ 0.83 $ 1.24 ---------------------------------------------- --------------- Pro Forma Diluted Shares 29,134 - 29,134 26,793 Pro Forma Diluted Earnings per Share $ 1.06 $ (0.25) $ 0.81 $ 1.23 ---------------------------------------------- ---------------
Press Release Page 7 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands) -------------------------------------------------------------------------------------------------------------- Twelve Months Ended May 31, ----------------------------------- 2001 2000 -------------- -------------- Cash flows from operating activities: Net income $ 23,668 $ 33,047 Non-cash items Depreciation and amortization 21,756 20,028 Restructuring and other 2,198 - Non-cash loss on investment 5,000 - Provision for losses 6,586 1,019 Deferred income taxes (3,694) 1,786 Minority interest in earnings 5,430 4,117 Other, net (346) 1,500 Changes in working capital, which provided (used) cash Merchant processing 7,562 (22,280) Other, net 10,454 2,079 -------------- -------------- Net cash provided by operating activities 78,614 41,296 -------------- -------------- Cash flows from investing activities: Capital expenditures (13,601) (6,002) Net business development activities (19,848) (5,000) -------------- -------------- Net cash used by investing activities (33,449) (11,002) -------------- -------------- Cash flows from financing activities: Net borrowings on line of credit 73,000 - Net repayments to NDC (106,197) (15,050) Principal payments under capital leases and other notes (3,144) (9,457) Net stock issued to employees under stock plans and dividends (1,157) - Distributions to minority interests (4,330) (4,377) -------------- -------------- Net cash used in financing activities (41,828) (28,884) -------------- -------------- Increase in cash and cash equivalents 3,337 1,410 Cash and cash equivalents, beginning of period 2,766 1,356 -------------- -------------- Cash and cash equivalents, end of period $ 6,103 $ 2,766 ============== ==============
Press Release Page 8 CONSOLIDATED CONDENSED BALANCE SHEETS GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands) --------------------------------------------------------------------------------------------------- May 31, May 31, 2001 2000 ------------- ------------- Assets ------ Cash and cash equivalents $ 6,103 $ 2,766 Accounts receivable, net 39,605 34,229 Merchant processing receivable 77,736 32,213 Other current assets 14,338 11,017 ------------- ------------- Current assets 137,782 80,225 Property and equipment, net 44,336 28,665 Intangible assets, net 277,375 173,726 Other assets 395 5,330 ------------- ------------- Total assets $ 459,888 $ 287,946 ============= ============= Liabilities & Shareholders' Equity ---------------------------------- Line of credit $ 73,000 $ - Due to NDC - 96,125 Merchant processing payable 10,113 11,880 Accounts payable and other accrued liabilities 47,916 26,748 Obligations under capital leases 2,739 2,900 ------------- ------------- Current liabilities 133,768 137,653 Obligations under capital leases 1,974 4,332 Other accrued liabilities 14,272 7,694 ------------- ------------- Total liabilities 150,014 149,679 ------------- ------------- Minority interest in equity of subsidiaries 38,852 18,472 Shareholders' equity 271,022 119,795 ------------- ------------- Total liabilities & shareholders' equity $ 459,888 $ 287,946 ============= =============
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