Exhibit 99
News Release
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For more information contact: |
Leslie M. Muma, President and CEO |
(262) 879-5000 |
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For immediate release: |
July 21, 2004 |
Fiserv Reports Record Earnings for Second Quarter of 2004
Brookfield, Wisconsin, July 21, 2004—Fiserv, Inc. (Nasdaq: FISV) announced today record earnings for the second quarter of 2004.
For the three-month period ended June 30, 2004, Fiserv processing and services revenues were $855.9 million, a 33% increase over the $643.9 million for the second quarter of 2003. Net income per share-diluted for the second quarter of 2004 was $0.48 per share, compared to $0.40 per share for the second quarter of 2003.
For the six-month period ended June 30, 2004, Fiserv processing and services revenues were $1,695.9 million, a 36% increase over the $1,248.2 million for the first six months of 2003. Net income per share-diluted for the first six months of 2004 was $0.95 per share, compared to $0.78 per share for the first six months of 2003.
“Fiserv had an exceptional first half of 2004, posting record revenues, earnings and free cash flow,” said Leslie M. Muma, President and CEO of Fiserv, Inc. “Year-to-date free cash flow in 2004 rose to $251.6 million, an increase of 40% over the prior year period. Our focus on operating fundamentals drove our strong earnings and cash flow during the quarter. We accomplished this by operating our businesses in our traditional disciplined manner and integrating our 2003 acquisitions effectively. We’re on track for a record year in 2004, with a solid sales pipeline to fuel organic growth and a promising outlook for acquisitions. Our target for full-year diluted earnings per share continues to be $1.87 to $1.93.”
“Contributing to Fiserv’s strong first half was the excellent performance of our health plan management services segment,” Muma added. “We believe we are in the right place at the right time as employers continue to look to companies like Fiserv for ways to reduce their health-care costs.”
Fiserv, Corporate Headquarters, 255 Fiserv Drive, Brookfield, Wisconsin 53045 PH: 262-879-5000
Mailing Address: P.O. Box 979, Brookfield, Wisconsin 53008-0979 Internet: www.fiserv.com
News Release
Significant new relationships and client renewals signed during the second quarter include the following: Caja Popular Mexicana, Mexico’s largest credit union, selected the Fiserv ICBS core banking system to process its operations throughout the 327 branches it maintains across the country; Sovereign Bank, a $47 billion financial institution based in Wyomissing, Pennsylvania, added to its already significant Fiserv relationship by agreeing to use the Fiserv UniFi PRO Mortgage eX system as its new loan origination solution; Liberty Bank for Savings, a $764 million asset financial institution in Chicago, significantly expanded its relationship with Fiserv by adding the Fiserv VISION core processing system, as well as Fiserv’s data warehouse, image-based check processing and imaging solutions from Fiserv Imagesoft; and National Securities Corporation, Seattle, Washington, a wholly owned subsidiary of Olympic Cascade Financial Corporation (AMEX: OLY), significantly expanded its relationship with Fiserv Securities for securities clearing services.
Fiserv, Inc. (Nasdaq: FISV) provides information management systems and services to the financial industry including transaction processing, business process outsourcing and software and systems solutions. The company serves more than 15,000 clients, including banks, broker-dealers, credit unions, financial planners and investment advisers, insurance companies and agents, self-funded employers, lenders and savings institutions. Headquartered in Brookfield, Wisconsin, Fiserv reported $2.7 billion in processing and services revenues for 2003. Fiserv can be found on the Internet at www.fiserv.com.
The disclosure set forth above contains forward-looking statements, specifically Mr. Muma’s statements regarding earnings targets, sales pipelines and acquisition prospects. These statements are covered by the safe harbor included in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to inherent assumptions, risks and uncertainties that may cause actual results to differ materially from those contemplated by such forward-looking statements. The factors that may cause actual results to differ materially from those contemplated by the forward-looking statements include, among others, changes in customers’ demand for the Corporation’s products, pricing and other actions by competitors, and general changes in economic conditions or U.S. financial markets. These factors should be considered in evaluating the forward-looking statements, and undue reliance should not be placed on such statements.
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Fiserv, Corporate Headquarters, 255 Fiserv Drive, Brookfield, Wisconsin 53045 PH: 262-879-5000
Mailing Address: P.O. Box 979, Brookfield, Wisconsin 53008-0979 Internet: www.fiserv.com
News Release
FISERV, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
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| | | Three Months Ended
June 30,
| | | Six Months Ended June 30,
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| | | 2004
| | | 2003
| | | 2004
| | | 2003
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Revenues: | | | | | | | | | | | | | | | | |
Processing and services | | $ | 855,917 | | | $ | 643,888 | | | $ | 1,695,903 | | | $ | 1,248,150 | |
Customer reimbursements | | | 90,103 | | | | 79,503 | | | | 187,597 | | | | 162,234 | |
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Total revenues | | | 946,020 | | | | 723,391 | | | | 1,883,500 | | | | 1,410,384 | |
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Cost of revenues: | | | | | | | | | | | | | | | | |
Salaries, commissions and payroll related costs | | | 336,207 | | | | 306,301 | | | | 677,007 | | | | 601,130 | |
Customer reimbursement expenses | | | 90,103 | | | | 79,503 | | | | 187,597 | | | | 162,234 | |
Data processing costs and equipment rentals | | | 56,858 | | | | 51,614 | | | | 112,126 | | | | 103,995 | |
Other operating expenses | | | 254,620 | | | | 113,930 | | | | 494,720 | | | | 208,986 | |
Depreciation and amortization | | | 47,952 | | | | 39,983 | | | | 94,910 | | | | 77,382 | |
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Total cost of revenues | | | 785,740 | | | | 591,331 | | | | 1,566,360 | | | | 1,153,727 | |
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Operating income | | | 160,280 | | | | 132,060 | | | | 317,140 | | | | 256,657 | |
Interest expense - net | | | (4,486 | ) | | | (3,474 | ) | | | (9,218 | ) | | | (6,451 | ) |
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Income before income taxes | | | 155,794 | | | | 128,586 | | | | 307,922 | | | | 250,206 | |
Income tax provision | | | 60,760 | | | | 50,148 | | | | 120,090 | | | | 97,580 | |
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Net income | | $ | 95,034 | | | $ | 78,438 | | | $ | 187,832 | | | $ | 152,626 | |
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Net income per share: | | | | | | | | | | | | | | | | |
Basic | | $ | 0.49 | | | $ | 0.41 | | | $ | 0.96 | | | $ | 0.79 | |
Diluted | | $ | 0.48 | | | $ | 0.40 | | | $ | 0.95 | | | $ | 0.78 | |
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Shares used in computing net incomeper share: | | | | | | | | | | | | | | | | |
Basic | | | 195,051 | | | | 193,295 | | | | 194,803 | | | | 192,716 | |
Diluted | | | 197,379 | | | | 195,811 | | | | 197,221 | | | | 195,279 | |
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Fiserv, Corporate Headquarters, 255 Fiserv Drive, Brookfield, Wisconsin 53045 PH: 262-879-5000
Mailing Address: P.O. Box 979, Brookfield, Wisconsin 53008-0979 Internet: www.fiserv.com
News Release
FISERV, INC. AND SUBSIDIARIES
SELECTED SEGMENT INFORMATION
(In thousands)
(Unaudited)
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| | | Three Months Ended
June 30,
| | | Six Months Ended June 30,
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| | | 2004
| | 2003
| | | 2004
| | 2003
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Processing and services revenues: | | | | | | | | | | | | | | |
Financial outsourcing, systems and services (“Financial”) | | $ | 551,140 | | $ | 472,302 | | | $ | 1,096,123 | | $ | 929,323 | |
Health plan management services (“Health”) | | | 218,260 | | | 93,157 | | | | 424,851 | | | 162,297 | |
Investment support and securities processing services (“Investment Services”) | | | 57,514 | | | 55,135 | | | | 116,453 | | | 110,185 | |
All other and corporate (“Other”) | | | 29,003 | | | 23,294 | | | | 58,476 | | | 46,345 | |
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Total | | $ | 855,917 | | $ | 643,888 | | | $ | 1,695,903 | | $ | 1,248,150 | |
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Operating income: | | | | | | | | | | | | | | |
Financial outsourcing, systems and services | | $ | 137,312 | | $ | 117,397 | | | $ | 274,282 | | $ | 224,853 | |
Health plan management services | | | 18,678 | | | 10,898 | | | | 38,056 | | | 22,999 | |
Investment support and securities processing services1 | | | 3,606 | | | 6,519 | | | | 3,480 | | | 13,759 | |
All other and corporate | | | 684 | | | (2,754 | ) | | | 1,322 | | | (4,954 | ) |
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Total | | $ | 160,280 | | $ | 132,060 | | | $ | 317,140 | | $ | 256,657 | |
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| 1 | The Investment Services segment’s 2004 year to date results include a $6.0 million charge in the first quarter of 2004 related to the Company’s broker-dealer subsidiary, Fiserv Securities, Inc. (“FSI”). FSI has been responding to inquiries from the Securities and Exchange Commission (“SEC”) as part of its industry-wide review of mutual fund trading practices, including market timing and late trading. FSI estimates cumulative revenues associated with such practices at approximately $4.6 million. Although the Company is unable to predict the ultimate outcome of these matters, if the SEC were to assert a violation of securities laws with respect to these matters, then FSI may be subject to fines and penalties and other administrative remedies which could have a material adverse impact on the Company’s quarterly operating results. |
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Fiserv, Corporate Headquarters, 255 Fiserv Drive, Brookfield, Wisconsin 53045 PH: 262-879-5000
Mailing Address: P.O. Box 979, Brookfield, Wisconsin 53008-0979 Internet: www.fiserv.com
News Release
FISERV, INC. AND SUBSIDIARIES
SUPPLEMENTAL FINANCIAL INFORMATION
(Unaudited)
Free Cash Flow
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| | | Six months ended June 30,
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| (In thousands) | | 2004
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Net cash provided by operating activities | | $ | 316,986 | | | $ | 181,329 | |
Changes in securities processing receivables and payables-net | | | 4,537 | | | | 78,989 | |
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Net cash provided by operating activities before changes in securities processing receivables and payables-net | | | 321,523 | | | | 260,318 | |
Capital expenditures, including capitalization of software costs for external customers | | | (69,914 | ) | | | (80,888 | ) |
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Free cash flow | | $ | 251,609 | | | $ | 179,430 | |
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Free cash flow is measured as net cash provided by operating activities before changes in securities processing receivables and payables less capital expenditures including capitalization of software costs for external customers, as reported in the Company’s condensed consolidated statements of cash flows. As the changes in securities processing receivables and payables are generally offset by changes in short-term borrowings and investments, which are included in financing and investing activities, management believes it is more meaningful to analyze changes in operating cash flows before the changes in securities processing receivables and payables. Free cash flow is a non-GAAP financial measure that the Company believes is useful to investors because it provides another measure of available cash flow after the Company has satisfied the capital requirements of its operations.
Internal Revenue Growth Percentages by Segment
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| | | Three months ended June 30,
| | | Six months ended June 30,
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| | | 2004
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Financial | | 0 | % | | 2 | % | | 1 | % | | 2 | % |
Health | | 50 | % | | 27 | % | | 46 | % | | 23 | % |
Investment Services | | 4 | % | | (8 | )% | | 6 | % | | (9 | )% |
Other | | 25 | % | | 9 | % | | 26 | % | | 3 | % |
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TOTAL | | 11 | % | | 5 | % | | 10 | % | | 3 | % |
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Internal revenue growth percentages are measured as the increase or decrease in total processing and services revenue for the current period less “acquired revenue from acquisitions” divided by total processing and services revenues from the prior year period plus “acquired revenue from acquisitions.” “Acquired revenue from acquisitions” was $288.4 million ($158.9 million in the Financial segment and $129.5 million in the Health segment) for the six months ended June 30, 2004 and represents pre-acquisition normalized revenue of acquired companies for the comparable prior year period. Internal revenue growth percentage is a non-GAAP financial measure that the Company believes is useful to investors because it provides an alternative to measure revenue growth excluding the impact of acquired revenues.
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Fiserv, Corporate Headquarters, 255 Fiserv Drive, Brookfield, Wisconsin 53045 PH: 262-879-5000
Mailing Address: P.O. Box 979, Brookfield, Wisconsin 53008-0979 Internet: www.fiserv.com
