Exhibit 99.1
Total System Services, Inc. | ||
One TSYS Way | +1.706.649.2307 | |
Post Office Box 2567 | +1.706.649.5740 | |
Columbus GA 31902-2567 | www.tsys.com |
For immediate release:
Contacts:
Shawn Roberts TSYS Investor Relations +1.706.644.6081 shawnroberts@tsys.com |
TSYS Reports First Quarter 2013 Basic Earnings per Share of $0.31;
Excluding Merger and Acquisition Costs,
Basic EPS was $0.33 up 11.5%
COLUMBUS, Ga., April 23, 2013 — TSYS (NYSE: TSS) today reported results for the first quarter with basic earnings per share (EPS), excluding expenses in connection with the pending acquisition of NetSpend Holdings, Inc. (NetSpend), of $0.33, an increase of 11.5% over 2012. Basic EPS on a GAAP basis was $0.31, an increase of 2.2% over 2012. Diluted EPS was $0.30, an increase of 1.7% over 2012. Revenues before reimbursable items for the quarter were $404.2 million, an increase of 2.3% over 2012. Total revenues were $465.0 million, an increase of 0.8% as compared to 2012. Total revenues were impacted by a decrease of $5.2 million in reimbursable items for the quarter.
“Our issuer processing business had strong same client transaction growth of 8.7% in the quarter. Excluding deconverted clients in the indirect merchant business, point-of-sale transactions increased 6.6% and sales volume in the direct merchant business was up 15.5%, including acquisitions. Also contributing to our strong results was our consolidated internal revenue growth of 3.9%, excluding the Bank of America Merchant Services de-conversion, combined with acquisitions in the acquiring space, which added 4.4% to our growth in revenues before reimbursable items,” said Philip W. Tomlinson, chairman and chief executive officer of TSYS.
“We recognized the financial results associated with our acquisition of ProPay, Inc. during the quarter and we look forward to benefiting from the new sales channels they provide in our merchant segment. Merger and acquisition expenses associated with the pending acquisition of NetSpend were $6.2 million in the quarter,” said Tomlinson.
Conference Call
TSYS will host its quarterly conference call at 5:00 p.m. ET on Tuesday, April 23. The conference call can be accessed via simultaneous Internet broadcast attsys.com by clicking on the link under “Webcasts” on the main homepage. The replay will be archived for 12 months and will be available approximately 30 minutes after the completion of the call. A slide presentation to accompany the call will be available by clicking on the link under “Webcasts” on the main homepage oftsys.com.
Page 1 of 12
Non-GAAP Measures
The financial highlights section of this release and this release contain the non-GAAP financial measures of revenues and operating results on a constant currency basis, basic EPS excluding merger and acquisition costs and revenues excluding reimbursable items, respectively, to describe TSYS’ performance. Management uses these non-GAAP financial measures to better understand and assess TSYS’ operating results and financial performance. TSYS believes these non-GAAP financial measures provide meaningful additional information about TSYS to assist investors in understanding and evaluating its operating results.
Additional information about non-GAAP financial measures and a reconciliation of those measures to the most directly comparable GAAP measures are included on pages 11 and 12 of this release.
About TSYS
At TSYS, (NYSE: TSS), we believe payments should revolve around people — not the other way around. We call this belief “People-Centered PaymentsSM.” By putting people at the center of every decision we make, with unmatched customer service and industry insight, TSYS is able to support financial institutions, businesses and governments in more than 80 countries. Offering merchant payment-acceptance solutions as well as services in credit, debit, prepaid, mobile, chip, healthcare and more, we make it possible for those in the global marketplace to conduct safe and secure electronic transactions with trust and convenience.
TSYS’ headquarters are located in Columbus, Georgia, with local offices spread across the Americas, EMEA and Asia-Pacific. TSYS provides services to more than half of the top 20 international banks, is a Fortune 1000 company and was named one of the 2012 World’s Most Ethical Companies by Ethisphere magazine. TSYS routinely posts all important information on its website, for more please visit us atwww.tsys.com.
Forward-Looking Statements
This press release contains “forward-looking statements” – that is, statements related to future, not past, events. Forward-looking statements often address our expected future business and financial performance and often contain words such as “expect,” “anticipate,” “intend,” “believe,” “should,” “plan,” “will,” “could,” and similar expressions. These forward-looking statements include, among others, statements regarding the pending NetSpend acquisition and anticipated benefits from the ProPay acquisition. These statements are based on the current beliefs and expectations of TSYS’ management, are based on management’s assumptions and are subject to significant risks and uncertainties. Actual results may differ materially from those contemplated by the forward-looking statements. A number of important factors could cause actual results to differ materially from those contemplated by our forward-looking statements in this press release. Many of these factors are beyond TSYS’ ability to control or predict. These factors include, but are not limited to, the risks described in TSYS’ filings with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K and Current Reports on Form 8-K. We believe these forward-looking statements are reasonable; however, undue reliance should not be placed on any forward-looking statements, which are based on current expectations. We do not assume any obligation to update any forward-looking statements as a result of new information, future developments or otherwise.
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TSYS Announces First Quarter 2013 Earnings
Page 3 of 12
TSYS
Financial Highlights
(unaudited)
(in thousands, except per share data)
Three Months Ended March 31, | ||||||||||||
2013 | 2012 | Percent Change | ||||||||||
Total revenues | $ | 464,996 | 461,162 | 0.8 | % | |||||||
Cost of services | 320,558 | 318,258 | 0.7 | |||||||||
Selling, general and administrative expenses | 66,054 | 58,073 | 13.7 | |||||||||
Merger and acquisition expenses | 3,481 | — | na | |||||||||
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Operating income | 74,903 | 84,831 | (11.7 | ) | ||||||||
Nonoperating income (expenses) | 1,018 | (405 | ) | nm | ||||||||
Merger and acquisition expenses - bridge loan facility | (2,743 | ) | — | na | ||||||||
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Income before income taxes, noncontrolling interests and equity in income of equity investments | 73,178 | 84,426 | (13.3 | ) | ||||||||
Income taxes | 17,846 | 29,556 | (39.6 | ) | ||||||||
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Income before noncontrolling interests and equity in income of equity investments | 55,332 | 54,870 | 0.8 | |||||||||
Equity in income of equity investments | 3,817 | 2,774 | 37.6 | |||||||||
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Net income | 59,149 | 57,644 | 2.6 | |||||||||
Net income attributable to noncontrolling interests | (2,121 | ) | (1,249 | ) | (69.8 | ) | ||||||
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Net income attributable to TSYS common shareholders | $ | 57,028 | 56,395 | 1.1 | % | |||||||
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Basic earnings per share | $ | 0.31 | 0.30 | 2.2 | % | |||||||
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Diluted earnings per share | $ | 0.30 | 0.30 | 1.7 | % | |||||||
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Dividends declared per share | $ | 0.10 | 0.10 | |||||||||
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nm = not meaningful |
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TSYS Announces First Quarter 2013 Earnings
Page 4 of 12
TSYS
Consolidated Statements of Comprehensive Income
(unaudited)
(in thousands)
Three Months Ended March 31, | ||||||||
2013 | 2012 | |||||||
Net income | $ | 59,149 | 57,644 | |||||
Other comprehensive income (loss), net of tax: | ||||||||
Foreign currency translation adjustments | (12,646 | ) | 2,963 | |||||
Postretirement healthcare plan adjustments | 155 | 263 | ||||||
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Other comprehensive income (loss) | (12,491 | ) | 3,226 | |||||
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Comprehensive income | 46,658 | 60,870 | ||||||
Comprehensive income (loss) attributable to noncontrolling interests | 467 | 541 | ||||||
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Comprehensive income attributable to TSYS common shareholders | $ | 46,191 | 60,329 | |||||
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TSYS Announces First Quarter 2013 Earnings
Page 5 of 12
TSYS
Earnings Per Share
(unaudited)
(in thousands, except per share data)
Three Months Ended March 31, 2013 | Three Months Ended March 31, 2012 | |||||||||||||||
Common Stock | Participating Securities | Common Stock | Participating Securities | |||||||||||||
Basic Earnings per share: | ||||||||||||||||
Net income | $ | 57,028 | 56,395 | |||||||||||||
Less income allocated to nonvested awards | (209 | ) | 209 | (196 | ) | 196 | ||||||||||
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Net income allocated to common stock for EPS calculation ( a ) | $ | 56,819 | 209 | 56,199 | 196 | |||||||||||
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Average common shares outstanding ( b ) | 186,108 | 699 | 188,052 | 667 | ||||||||||||
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Average common shares and participating securities | 186,807 | 188,719 | ||||||||||||||
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Basic Earnings per share ( a )/( b ) | $ | 0.31 | 0.30 | 0.30 | 0.29 | |||||||||||
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Diluted Earnings per share: | ||||||||||||||||
Net income | $ | 57,028 | 56,395 | |||||||||||||
Less income allocated to nonvested awards | (208 | ) | 208 | (196 | ) | 196 | ||||||||||
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Net income allocated to common stock for EPS calculation ( c ) | $ | 56,820 | 208 | 56,199 | 196 | |||||||||||
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Average common shares outstanding | 186,108 | 699 | 188,052 | 667 | ||||||||||||
Increase due to assumed issuance of shares related to common equivalent shares outstanding | 1,274 | 1,010 | ||||||||||||||
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Average common and common equivalent shares outstanding ( d ) | 187,382 | 699 | 189,062 | 667 | ||||||||||||
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Average common and common equivalent shares and participating securities | 188,095 | 189,729 | ||||||||||||||
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Diluted Earnings per share ( c )/( d ) | $ | 0.30 | 0.30 | 0.30 | 0.29 | |||||||||||
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TSYS Announces First Quarter 2013 Earnings
Page 6 of 12
TSYS
Segment Breakdown
(unaudited)
(in thousands)
Three Months Ended March 31, | ||||||||||||||||
Change | ||||||||||||||||
2013 | 2012 | $ | % | |||||||||||||
Revenues before reimbursable items | ||||||||||||||||
North America Services | $ | 205,596 | 204,050 | 1,546 | 0.8 | % | ||||||||||
International Services | 92,593 | 96,491 | (3,898 | ) | (4.0 | ) | ||||||||||
Merchant Services | 109,301 | 98,356 | 10,945 | 11.1 | ||||||||||||
Intersegment revenues | (3,253 | ) | (3,717 | ) | 464 | 12.5 | ||||||||||
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Revenues before reimbursable items from external customers | $ | 404,237 | 395,180 | 9,057 | 2.3 | % | ||||||||||
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Total revenues | ||||||||||||||||
North America Services | $ | 239,789 | 240,599 | (810 | ) | (0.3 | )% | |||||||||
International Services | 97,096 | 100,360 | (3,264 | ) | (3.3 | ) | ||||||||||
Merchant Services | 132,901 | 125,518 | 7,383 | 5.9 | ||||||||||||
Intersegment revenues | (4,790 | ) | (5,315 | ) | 525 | 9.9 | ||||||||||
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Revenues from external customers | $ | 464,996 | 461,162 | 3,834 | 0.8 | % | ||||||||||
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Depreciation and amortization | ||||||||||||||||
North America Services | $ | 18,083 | 18,453 | (370 | ) | (2.0 | )% | |||||||||
International Services | 12,852 | 12,911 | (59 | ) | (0.5 | ) | ||||||||||
Merchant Services | 11,153 | 8,786 | 2,367 | 26.9 | ||||||||||||
Corporate Admin and Other | 410 | 723 | (313 | ) | (43.3 | ) | ||||||||||
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Total depreciation and amortization | $ | 42,498 | 40,873 | 1,625 | 4.0 | % | ||||||||||
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Segment operating income | ||||||||||||||||
North America Services | $ | 67,202 | 68,347 | (1,145 | ) | (1.7 | )% | |||||||||
International Services | 6,626 | 4,113 | 2,513 | 61.1 | ||||||||||||
Merchant Services | 29,327 | 34,219 | (4,892 | ) | (14.3 | ) | ||||||||||
Corporate Admin and Other | (28,252 | ) | (21,848 | ) | (6,404 | ) | (29.3 | ) | ||||||||
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Operating income | $ | 74,903 | 84,831 | (9,928 | ) | (11.7 | )% | |||||||||
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Other: | ||||||||||||||||
Reimbursable items: | ||||||||||||||||
North America Services | $ | 34,193 | 36,549 | (2,356 | ) | (6.4 | )% | |||||||||
International Services | 4,503 | 3,869 | 634 | 16.4 | ||||||||||||
Merchant Services | 23,600 | 27,162 | (3,562 | ) | (13.1 | ) | ||||||||||
Intersegment revenues | (1,537 | ) | (1,598 | ) | 61 | 3.8 | ||||||||||
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Reimbursable items | $ | 60,759 | 65,982 | (5,223 | ) | (7.9 | )% | |||||||||
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Volumes: | ||||||||||||||||
FTEs (full-time equivalents) | ||||||||||||||||
North America Services | 4,214 | 3,886 | 328 | 8.4 | % | |||||||||||
International Services | 2,322 | 2,697 | (375 | ) | (13.9 | ) | ||||||||||
Merchant Services | 1,581 | 1,213 | 368 | 30.3 | ||||||||||||
Corporate Admin and Other | 435 | 407 | �� | 28 | 6.9 | |||||||||||
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FTEs | 8,552 | 8,203 | 349 | 4.3 | % | |||||||||||
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At | Change | |||||||||||||||
Total assets (in thousands) | 3/31/2013 | 12/31/2012 | $ | % | ||||||||||||
North America Services | $ | 1,769,195 | 1,744,877 | 24,318 | 1.4 | % | ||||||||||
International Services | 396,529 | 445,642 | (49,113 | ) | (11.0 | ) | ||||||||||
Merchant Services | 710,928 | 703,725 | 7,203 | 1.0 | ||||||||||||
Intersegment assets | (837,458 | ) | (870,406 | ) | 32,948 | 3.8 | ||||||||||
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Total assets | $ | 2,039,194 | 2,023,838 | 15,356 | 0.8 | % | ||||||||||
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Three Months Ended March 31, | ||||||||||||||||
Change | ||||||||||||||||
2013 | 2012 | Inc(Dec) | % | |||||||||||||
North America Segment: | ||||||||||||||||
Accounts on File (AOF) (in millions) | 422.8 | 361.8 | 61.0 | 16.9 | % | |||||||||||
Transactions (in millions) | 2,013.4 | 1,867.2 | 146.2 | 7.8 | % | |||||||||||
International Segment: | ||||||||||||||||
AOF (in millions) | 55.8 | 54.1 | 1.7 | 3.2 | % | |||||||||||
Transactions (in millions) | 434.2 | 383.0 | 51.2 | 13.4 | % | |||||||||||
Merchant Segment: | ||||||||||||||||
Point-of-sale Transactions (in millions) | 1,099.1 | 1,219.7 | (120.6 | ) | (9.9 | )% | ||||||||||
Dollar sales volume (in millions) | $ | 10,132.3 | $ | 8,775.1 | 1,357.2 | 15.5 | % |
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TSYS Announces First Quarter 2013 Earnings
Page 7 of 12
TSYS
Reclassification of Operating Segment Breakdown Due to Two Corporate Initiatives
(unaudited)
(in thousands)
Three Months Ended | ||||||||||||||||||||||||
Mar 31, 2012 | Jun 30, 2012 | Sep 30, 2012 | Dec 31, 2012 | Total 2012 | Three Months Ended Mar 31, 2013 | |||||||||||||||||||
Depreciation and amortization | ||||||||||||||||||||||||
North America Services | $ | 18,453 | 18,821 | 18,582 | 18,816 | 74,672 | 18,083 | |||||||||||||||||
International Services | 12,911 | 15,006 | 14,701 | 14,510 | 57,128 | 12,852 | ||||||||||||||||||
Merchant Services | 8,786 | 8,667 | 9,290 | 9,509 | 36,252 | 11,153 | ||||||||||||||||||
Corporate Admin | 723 | 719 | 669 | 446 | 2,557 | 410 | ||||||||||||||||||
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Total depreciation and amortization | $ | 40,873 | 43,213 | 43,242 | 43,281 | 170,609 | 42,498 | |||||||||||||||||
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Segment operating income | ||||||||||||||||||||||||
North America Services | $ | 68,347 | 72,231 | 70,080 | 78,835 | 289,493 | 67,202 | |||||||||||||||||
International Services | 4,113 | 9,438 | 7,725 | 6,058 | 27,334 | 6,626 | ||||||||||||||||||
Merchant Services | 34,219 | 32,950 | 34,508 | 30,438 | 132,115 | 29,327 | ||||||||||||||||||
Corporate Admin | (21,848 | ) | (22,523 | ) | (21,420 | ) | (25,500 | ) | (91,291 | ) | (28,252 | ) | ||||||||||||
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Operating income | $ | 84,831 | 92,096 | 90,893 | 89,831 | 357,651 | 74,903 | |||||||||||||||||
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Volumes: | ||||||||||||||||||||||||
FTEs (full-time equivalents) | ||||||||||||||||||||||||
North America Services | 3,886 | 3,964 | 4,014 | 4,096 | 4,214 | |||||||||||||||||||
International Services | 2,697 | 2,624 | 2,517 | 2,404 | 2,322 | |||||||||||||||||||
Merchant Services | 1,213 | 1,242 | 1,427 | 1,481 | 1,581 | |||||||||||||||||||
Corporate Admin | 407 | 415 | 425 | 425 | 435 | |||||||||||||||||||
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FTEs | 8,203 | 8,245 | 8,383 | 8,406 | 8,552 | |||||||||||||||||||
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TSYS Announces First Quarter 2013 Earnings
Page 8 of 12
TSYS
Balance Sheet
(unaudited)
(in thousands)
Mar 31, 2013 | Dec 31, 2012 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 223,097 | 247,612 | |||||
Restricted cash | 9,046 | 282 | ||||||
Accounts receivable, net | 237,257 | 247,083 | ||||||
Deferred income tax assets | 8,232 | 9,825 | ||||||
Prepaid expenses and other current assets | 89,070 | 69,924 | ||||||
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Total current assets | 566,702 | 574,726 | ||||||
Goodwill | 517,147 | 518,344 | ||||||
Property and equipment, net | 252,797 | 260,389 | ||||||
Computer software, net | 254,785 | 226,917 | ||||||
Contract acquisition costs, net | 162,094 | 161,267 | ||||||
Other intangible assets, net | 124,325 | 130,054 | ||||||
Equity investments, net | 91,751 | 87,764 | ||||||
Deferred income tax assets, net | 5,125 | 5,334 | ||||||
Other assets | 64,468 | 59,043 | ||||||
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Total assets | $ | 2,039,194 | 2,023,838 | |||||
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Liabilities | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 33,143 | 63,370 | |||||
Current portion of notes payable | 24,363 | 27,361 | ||||||
Current portion of obligations under capital leases | 23,007 | 13,263 | ||||||
Accrued salaries and employee benefits | 16,539 | 26,243 | ||||||
Other current liabilities | 123,145 | 100,282 | ||||||
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Total current liabilities | 220,197 | 230,519 | ||||||
Long-term debt, excluding current portion | 169,229 | 174,859 | ||||||
Deferred income tax liabilities | 54,103 | 48,074 | ||||||
Obligations under capital leases, excluding current portion | 16,517 | 17,155 | ||||||
Other long-term liabilities | 65,602 | 68,791 | ||||||
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Total liabilities | 525,648 | 539,398 | ||||||
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Redeemable noncontrolling interest | 40,589 | 39,505 | ||||||
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Equity | ||||||||
Shareholders’ equity: | ||||||||
Common stock | 20,280 | 20,247 | ||||||
Additional paid-in capital | 139,815 | 141,793 | ||||||
Accumulated other comprehensive income (loss), net | (9,431 | ) | 1,408 | |||||
Treasury stock | (283,403 | ) | (287,301 | ) | ||||
Retained earnings | 1,587,540 | 1,549,063 | ||||||
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Total shareholders’ equity | 1,454,801 | 1,425,210 | ||||||
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Noncontrolling interests in consolidated subsidiaries | 18,156 | 19,725 | ||||||
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Total equity | 1,472,957 | 1,444,935 | ||||||
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Total liabilities and equity | $ | 2,039,194 | 2,023,838 | |||||
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TSYS Announces First Quarter 2013 Earnings
Page 9 of 12
TSYS
Cash Flow
(unaudited)
(in thousands)
Three Months Ended March 31, | ||||||||
2013 | 2012 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net income | $ | 59,149 | 57,644 | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Equity in income of equity investments | (3,817 | ) | (2,774 | ) | ||||
Net loss on foreign currency translation | (45 | ) | 504 | |||||
Depreciation and amortization | 42,498 | 40,873 | ||||||
Amortization of debt issuance costs | 2,860 | 47 | ||||||
Changes in fair value of private equity investments | (1,227 | ) | — | |||||
Share-based compensation | 4,593 | 3,598 | ||||||
Excess tax benefit from share-based payment arrangements | (536 | ) | (510 | ) | ||||
Provisions for bad debt expense and billing adjustments | 376 | (144 | ) | |||||
Charges for transaction processing provisions | 4,160 | 1,063 | ||||||
Deferred income tax expense (benefit) | 9,442 | 6,425 | ||||||
(Gain) loss on disposal of equipment, net | 55 | (2 | ) | |||||
Changes in operating assets and liabilities: | ||||||||
Restricted cash | (8,624 | ) | — | |||||
Accounts receivable | 5,745 | (5,424 | ) | |||||
Prepaid expenses, other current assets and other long-term assets | (23,623 | ) | (7,044 | ) | ||||
Accounts payable | (30,182 | ) | 9,825 | |||||
Accrued salaries and employee benefits | (9,266 | ) | (19,111 | ) | ||||
Other current liabilities and other long-term liabilities | 879 | 12,943 | ||||||
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Net cash provided by operating activities | 52,437 | 97,913 | ||||||
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CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Purchases of property and equipment, net | (6,481 | ) | (4,984 | ) | ||||
Additions to licensed computer software from vendors | (29,904 | ) | (2,593 | ) | ||||
Additions to internally developed computer software | (5,297 | ) | (4,435 | ) | ||||
Cash used in acquisitions, net of cash acquired | — | (1,750 | ) | |||||
Purchase of private equity investments | (411 | ) | (499 | ) | ||||
Additions to contract acquisition costs | (13,666 | ) | (5,099 | ) | ||||
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Net cash used in investing activities | (55,759 | ) | (19,360 | ) | ||||
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CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Principal payments on long-term debt borrowings and capital lease obligations | (9,784 | ) | (6,505 | ) | ||||
Proceeds from exercise of stock options | 2,551 | 2,701 | ||||||
Excess tax benefit from share-based payment arrangements | 536 | 510 | ||||||
Repurchase of common stock under plans and tax withholding | (5,501 | ) | — | |||||
Debt issuance costs | (3,534 | ) | — | |||||
Subsidiary dividends paid to noncontrolling shareholders | (953 | ) | (1,087 | ) | ||||
Dividends paid on common stock | — | (18,913 | ) | |||||
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Net cash used in financing activities | (16,685 | ) | (23,294 | ) | ||||
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CASH AND CASH EQUIVALENTS: | ||||||||
Effect of exchange rate changes on cash and cash equivalents | (4,508 | ) | (641 | ) | ||||
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Net increase (decrease) in cash and cash equivalents | (24,515 | ) | 54,618 | |||||
Cash and cash equivalents at beginning of period | 247,612 | 316,337 | ||||||
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Cash and cash equivalents at end of period | $ | 223,097 | 370,955 | |||||
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TSYS Announces First Quarter 2013 Earnings
Page 10 of 12
Supplemental Information:
Accounts on File | ||||||||||||
Total | ||||||||||||
(in millions) | March 2013 | March 2012 | % Change | |||||||||
Consumer Credit | 203.8 | 197.2 | 3.3 | |||||||||
Retail | 25.2 | 25.3 | (0.3 | ) | ||||||||
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Total Consumer | 229.0 | 222.5 | 2.9 | |||||||||
Commercial | 37.9 | 35.5 | 6.6 | |||||||||
Other | 13.4 | 9.4 | 42.9 | |||||||||
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Subtotal | 280.3 | 267.4 | 4.8 | |||||||||
Prepaid/Stored Value | 107.3 | 88.5 | 21.3 | |||||||||
Government Services | 59.4 | 30.5 | 94.4 | |||||||||
Commercial Card Single Use | 31.6 | 29.5 | 7.3 | |||||||||
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Total AOF | 478.6 | 415.9 | 15.1 | |||||||||
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Growth in Accounts on File(in millions): | ||||||||
March 2012 to March 2013 | March 2011 to March 2012 | |||||||
Beginning balance | 415.9 | 356.7 | ||||||
Change in accounts on file due to: | ||||||||
Internal growth of existing clients | 32.2 | 36.7 | ||||||
New clients | 77.1 | 41.8 | ||||||
Purges/Sales | (44.9 | ) | (18.5 | ) | ||||
Deconversions | (1.7 | ) | (0.8 | ) | ||||
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Ending balance | 478.6 | 415.9 | ||||||
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TSYS Announces First Quarter 2013 Earnings
Page 11 of 12
Reconciliation of GAAP to Non-GAAP
Non-GAAP Measures
The schedule below provides a reconciliation of revenues and operating results on a constant currency basis to reported revenues and operating income. This non-GAAP measure presents year-to-date 2013 financial results using the previous year’s foreign currency exchange rates. On a year-to-date constant currency basis, TSYS’ total revenues grew 1.7% as compared to a reported GAAP increase of 0.8%.
The schedule below also provides a reconciliation of basic EPS excluding merger and acquisition costs to basic EPS. On a year-to-date basis, TSYS’ basic EPS excluding merger and acqusiition costs grew 11.5% as compared to a reported GAAP increase of 2.2%.
TSYS believes that non-GAAP financial measures are important to enable investors to understand and evaluate its ongoing operating results. Accordingly, TSYS includes non-GAAP financial measures when reporting its financial results to shareholders and investors in order to provide them with an additional tool to evaluate TSYS’ ongoing business operations. TSYS believes that the non-GAAP financial measures are representative of comparative financial performance that reflects the economic substance of TSYS’ current and ongoing business operations.
Although non-GAAP financial measures are often used to measure TSYS’ operating results and assess its financial performance, they are not necessarily comparable to similarly titled captions of other companies due to potential inconsistencies in the method of calculation.
TSYS believes that its use of non-GAAP financial measures provides investors with the same key financial performance indicators that are utilized by management to assess TSYS’ operating results, evaluate the business and make operational decisions on a prospective, going-forward basis. Hence, management provides disclosure of non-GAAP financial measures to give shareholders and potential investors an opportunity to see TSYS as viewed by management, to assess TSYS with some of the same tools that management utilizes internally and to be able to compare such information with prior periods. TSYS believes that the presentation of GAAP financial measures alone would not provide its shareholders and potential investors with the ability to appropriately analyze its ongoing operational results, and therefore expected future results. TSYS therefore believes that inclusion of non-GAAP financial measures provides investors with additional information to help them better understand its financial statements just as management utilizes these non-GAAP financial measures to better understand the business, manage budgets and allocate resources.
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TSYS Announces First Quarter 2013 Earnings
Page 12 of 12
Reconciliation of GAAP to Non-GAAP
Constant Currency Comparison
(unaudited)
(in thousands)
Three Months Ended March 31, | ||||||||||||
Percent | ||||||||||||
2013 | 2012 | Change | ||||||||||
Consolidated | ||||||||||||
Constant currency (1) | $ | 469,016 | 461,162 | 1.7 | % | |||||||
Foreign currency (2) | (4,020 | ) | — | |||||||||
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Total revenues | $ | 464,996 | 461,162 | 0.8 | % | |||||||
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Constant currency (1) | $ | 74,961 | 84,831 | (11.6 | )% | |||||||
Foreign currency (2) | (58 | ) | — | |||||||||
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Operating income | $ | 74,903 | 84,831 | (11.7 | )% | |||||||
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International Services | ||||||||||||
Constant currency (1) | $ | 101,185 | 100,360 | 0.8 | % | |||||||
Foreign currency (2) | (4,089 | ) | — | |||||||||
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Total revenues | $ | 97,096 | 100,360 | (3.3 | )% | |||||||
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(1) | Reflects current period results on a non-GAAP basis as if foreign currency rates did not change from the comparable prior year period. |
(2) | Reflects the impact of calculated changes in foreign currency rates from the comparable period. |
Basic EPS Excluding Merger and Acquisition Costs
(unaudited)
(in thousands)
Three Months Ended March 31, | ||||||||||||
2013 | 2012 | Percent Change | ||||||||||
Net income attributable to TSYS common shareholders (a) | $ | 57,028 | 56,395 | 1.1 | ||||||||
Add: Merger and acquisition expenses, net of taxes* | 5,222 | — | ||||||||||
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Net income before merger and acquisition expense (c) | $ | 62,250 | 56,395 | 10.4 | ||||||||
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Average common shares outstanding (b) | 186,807 | 188,719 | ||||||||||
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Basic Earnings per share ( a )/( b ) | $ | 0.31 | 0.30 | 2.2 | ||||||||
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Basic Earnings per share excluding merger and acquisition expenses ( c )/( b ) | $ | 0.33 | 0.30 | 11.5 | ||||||||
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* - Certain merger and acquisition costs are nondeductible for income tax purposes
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