EX-99.1 2 gp5285ex991.txt EXHIBT 99.1 Exhibit 99.1 GLOBAL PAYMENTS REPORTS THIRD QUARTER EARNINGS ATLANTA, March 31 /PRNewswire-FirstCall/ -- Global Payments Inc. (NYSE: GPN) today announced results for its third fiscal quarter ended February 28, 2006. The company's prior period earnings per share results and share amounts reflect the retroactive effect of its two-for-one stock split, which was completed through a stock dividend that was distributed on October 28, 2005. (Logo: http://www.newscom.com/cgi-bin/prnh/20010221/ATW031LOGO ) For the third quarter, revenue grew 15 percent to $225.2 million compared to $195.5 million in the prior year quarter. Net income grew 39 percent to $30.1 million compared to $21.6 million in the prior year quarter, and diluted earnings per share grew 33 percent to $0.36 compared to $0.27 in the prior year quarter. For the nine months ended February 28, 2006, revenue grew 16 percent to $669.3 million compared to $576.7 million in the prior year period. Excluding restructuring charges for the nine months ended February 28, 2006 (see attached reconciliation schedule), net income grew 34 percent to $92.7 million from $69.4 million in the prior year period, and diluted earnings per share grew 30 percent to $1.13 from $0.87 in the prior year period. In accordance with GAAP, the nine month period net income and diluted earnings per share include restructuring charges of $1.9 million ($1.2 million, net of tax) and $0.01 per diluted share, respectively, relating to the completion of a planned operating center consolidation, which was announced in July 2005. These charges consisted of employee termination benefits and facility-related closing costs. For the nine months ended February 28, 2006, GAAP net income and diluted earnings per share were $91.5 million and $1.12, respectively. Comments and Outlook Chairman, President and CEO, Paul R. Garcia, stated, "We are once again pleased with our solid quarterly financial results, which primarily reflect continued strength in our North American direct merchant channels and our DolEx-branded consumer money transfer channel. We also continue to achieve solid progress toward completing our announced Asia-Pacific joint venture with HSBC. Based on our results, we are raising our fiscal 2006 annual revenue guidance to a range of $896 million to $903 million, or 14% to 15% growth versus $784 million in fiscal 2005. We are also raising our fiscal 2006 annual diluted earnings per share guidance (excluding restructuring and other charges in the current and prior fiscal year) to a range of $1.48 to $1.51 for growth of 24% to 27% versus $1.19 in fiscal 2005."(1) Conference Call Global Payments will hold a conference call today, March 31, 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 http://www.globalpaymentsinc.com. A replay of the call will be available on the Global Payments Web site through April 14, 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 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 and the Philippines. For more information about the company and its services, visit http://www.globalpaymentsinc.com. (1) Fiscal 2005 diluted earnings per share was $1.16 on a GAAP basis, which reflects restructuring and other charges of $2.4 million, net of tax, or $0.03 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 (including the previously announced joint venture with HSBC in the Asia-Pacific region), 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. Forbes 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 February 28, ---------------------------- 2006 2005 ------------ ------------ Revenues $ 225,159 $ 195,526 Operating expenses: Cost of service 88,863 87,378 Sales, general and administrative 88,161 69,929 177,024 157,307 Operating income 48,135 38,219 Other income (expense): Interest and other income 2,172 793 Interest and other expense (1,695) (2,969) 477 (2,176) Income before income taxes and minority interest 48,612 36,043 Provision for income taxes (16,577) (12,716) Minority interest, net of tax (1,924) (1,704) Net income $ 30,111 $ 21,623 Earnings per share: Basic $ 0.38 $ 0.28(1) Diluted $ 0.36 $ 0.27(1) Weighted average shares outstanding: Basic 79,219 77,412(1) Diluted 82,771 80,206(1) (1) All share and per share amounts reflect the retroactive effect of the company's two-for-one stock split. UNAUDITED CONSOLIDATED STATEMENTS OF INCOME GLOBAL PAYMENTS INC. AND SUBSIDIARIES (In thousands, except per share data) Nine Months Ended February 28, ---------------------------- 2006 2005 ------------ ------------ Revenues $ 669,288 $ 576,666 Operating expenses: Cost of service 268,957 247,168 Sales, general and administrative 249,766 208,887 Restructuring 1,878 - 520,601 456,055 Operating income 148,687 120,611 Other income (expense): Interest and other income 4,606 1,509 Interest and other expense (5,017) (6,446) (411) (4,937) Income before income taxes and minority interest 148,276 115,674 Provision for income taxes (50,562) (40,812) Minority interest, net of tax (6,252) (5,463) Net income $ 91,462 $ 69,399 Earnings per share: Basic $ 1.16 $ 0.90(1) Diluted $ 1.12 $ 0.87(1) Weighted average shares outstanding: Basic 78,660 76,896(1) Diluted 81,892 79,468(1) (1) All share and per share amounts reflect the retroactive effect of the company's two-for-one stock split. CONSOLIDATED CONDENSED BALANCE SHEETS GLOBAL PAYMENTS INC. AND SUBSIDIARIES (In thousands) February 28, May 31, 2006 2005 ------------ ------------ (Unaudited) Assets Cash and cash equivalents $ 213,143 $ 48,979 Accounts receivable, net 59,892 54,932 Claims receivable, net 1,058 937 Settlement processing assets 21,790 63,435 Other current assets 22,232 21,707 Current assets 318,115 189,990 Property and equipment, net 102,730 104,173 Goodwill 382,475 372,744 Other intangible assets, net 168,075 175,006 Other assets 10,591 11,592 Total assets $ 981,986 $ 853,505 Liabilities & Shareholders' Equity Line of credit $ - $ 50,000 Line of credit with CIBC - 8,606 Settlement processing obligations 72,087 27,394 Payable to money transfer beneficiaries 7,488 5,694 Accounts payable and other accrued liabilities 85,312 88,067 Notes payable - 1,347 Obligations under capital leases- current portion 1,127 1,695 Current liabilities 166,014 182,803 Obligations under capital leases - 746 Other accrued liabilities 85,559 75,266 Total liabilities 251,573 258,815 Minority interest in equity of subsidiaries 12,956 16,340 Shareholders' equity 717,457 578,350 Total liabilities & shareholders' equity $ 981,986 $ 853,505 UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW GLOBAL PAYMENTS INC. AND SUBSIDIARIES (In thousands) Nine Months Ended February 28, ---------------------------- 2006 2005 ------------ ------------ Cash flows from operating activities: Net income $ 91,462 $ 69,399 Non-cash items Depreciation and amortization 30,676 33,394 Minority interest in earnings 6,252 5,516 Other, net 25,823 25,441 Changes in working capital, which provided (used) cash Settlement processing 83,572 51,159 Other, net (9,726) 3,118 Net cash provided by operating activities 228,059 188,027 Cash flows from investing activities: Capital expenditures (17,835) (27,639) Business acquisitions, net of cash acquired (3,379) (30,490) Net cash used in investing activities (21,214) (58,129) Cash flows from financing activities: Net payments on line of credit (50,000) (36,400) Net payments on line of credit with CIBC (8,606) (72,766) Principal payments under capital leases and other notes (2,661) (9,755) Net stock issued to employees under stock plans and dividends 15,724 13,350 Distributions to minority interests (7,889) (7,507) Net cash used in financing activities (53,432) (113,078) Effect of exchange rate changes on cash 10,751 6,910 Increase in cash and cash equivalents 164,164 23,730 Cash and cash equivalents, beginning of period 48,979 34,472 Cash and cash equivalents, end of period $ 213,143 $ 58,202 UNAUDITED CONSOLIDATED STATEMENTS OF INCOME GLOBAL PAYMENTS INC. AND SUBSIDIARIES (In thousands, except per share data)
2006 2005 Nine Months Ended February 28, Normalized Restructuring (1) GAAP GAAP --------------------------------- ------------ ---------------- ------------ ------------ Revenue $ 669,288 $ - $ 669,288 $ 576,666 Operating expenses: Cost of service 268,957 - 268,957 247,168 Sales, general and administrative 249,766 - 249,766 208,887 Restructuring - 1,878 1,878 - 518,723 1,878 520,601 456,055 Operating income 150,565 (1,878) 148,687 120,611 Other income/(expense): Interest and other income 4,606 - 4,606 1,509 Interest and other expense (5,017) - (5,017) (6,446) (411) - (411) (4,937) Income before income taxes 150,154 (1,878) 148,276 115,674 Provision for income taxes (51,202) 640 (50,562) (40,812) Minority interest, net of tax (6,252) - (6,252) (5,463) Net income $ 92,700 $ (1,238) $ 91,462 $ 69,399 Basic shares 78,660 - 78,660 76,896(2) Basic earnings per share $ 1.18 $ (0.02) $ 1.16 $ 0.90(2) Diluted shares 81,892 - 81,892 79,468(2) Diluted earnings per share $ 1.13 $ (0.01) $ 1.12 $ 0.87(2)
(1) Relates to severance and facility related costs resulting from planned facility closures, as well as the related income tax benefit. (2) All share and per share amounts reflect the retroactive effect of the company's two-for-one stock split. SOURCE Global Payments Inc. -0- 03/31/2006 /CONTACT: Jane M. Forbes of Global Payments Inc., +1-770-829-8234, or fax, +1-770-829-8267, or investor.relations@globalpay.com/ /Photo: 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/