Exhibit 99
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For more information contact:
Leslie M. Muma, President and CEO
(262) 879-5000
For immediate release:
April 21, 2005
Fiserv Reports Record Earnings for First Quarter of 2005
Brookfield, Wis., April 21, 2005—Fiserv, Inc. (Nasdaq: FISV) announced today record earnings for the first quarter of 2005.
For the three-month period ended March 31, 2005, Fiserv processing and services revenues were $882.3 million, a 9% increase over the $811.6 million for the first quarter of 2004. Net income per share-diluted from continuing operations (excluding realized gain from sale of investment of $0.14 per share) for the first quarter of 2005 was $0.58 per share, compared to $0.49 per share for the first quarter of 2004.
“We are pleased with our first quarter results which included strong operating earnings and margins across our businesses. We were also pleased to see our financial segment internal revenue growth rate at 5%, as our largest operating segment continues to demonstrate improvement over the prior year. We are projecting 2005 full-year diluted earnings per share (excluding realized gain from sale of investment) of $2.19 to $2.23 per share and for the second quarter $0.53 to $0.55 per share,” said Leslie M. Muma, president and chief executive officer of Fiserv.
In the first quarter, Fiserv repurchased $106.7 million of its common stock, acquiring 2.8 million shares. This leaves a total of 5.5 million shares available for repurchase under a November 2004 board authorization.
“Our management team also completed two significant transactions in the quarter, the signing of a 12-year check processing and image archive agreement with three Australian banks and the completion of our previously announced sale of our securities clearing businesses,” said Muma.
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
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Fiserv signed a 12-year agreement to provide check processing and image archive services for Commonwealth Bank of Australia, National Australia Bank and Westpac Banking Corp. Based on estimated volumes, the agreement will generate projected revenue of $460 million. The transaction will be mildly dilutive to Fiserv’s earnings in 2005 by $0.01 to $0.02 per share due to transition expenses and is expected to contribute to earnings in 2006 and beyond. Fiserv began managing operations in six Australian cities on April 18, 2005 for two of the banks, and will begin processing for the third bank in the second half of 2005.
On March 24, 2005, Fiserv completed the sale of its securities clearing businesses to Fidelity Global Brokerage Group, Inc. The sales price, paid in cash, was $345 million, which is subject to certain post-closing adjustments. The agreement also provides for a contingent payment of up to $15 million to be paid after the first anniversary of the closing date based on achievement of certain revenue targets. The financial results of Fiserv’s securities clearing businesses are reported as discontinued operations for all periods presented and are excluded from reported revenues, cost of revenues and operating cash flows.
In addition, this quarter Fiserv completed the acquisition of Del Mar Database, a provider of solutions to automate the back office of mortgage brokers and lenders, as part of its strategy to provide an end-to-end solution to the mortgage industry.
Significant client renewals and other new relationships gained in the first quarter include the following: DaimlerChrysler Services North America LLC significantly expanded its relationship with Fiserv’s LeMans unit for automotive finance products and services; HomeBanc Mortgage Corp., a mortgage banking company that focuses on originating purchase money residential mortgage loans in the Southeast United States, has contracted to use the MortgageServ loan servicing platform for life-of-loan management; and Baltimore County Savings Bank, a $765 million financial institution in Baltimore, Md., chose Fiserv for a comprehensive package of
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
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financial technology that includes Fiserv VISION for core processing, check processing, document imaging, Fiserv EFT for electronic funds transfer, IPS-Sendero for risk management and the VISION Data Warehouse.
The Company plans to file its first quarter Form 10-Q on April 29, 2005.
Fiserv, Inc. (Nasdaq: FISV) provides information management systems and services to the financial and health benefits industries, including transaction processing, outsourcing, business process outsourcing and software and systems solutions. The company serves more than 16,000 clients worldwide, including banks, credit unions, financial planners/investment advisers, insurance companies and agents, self-insured employers, lenders and savings institutions. Headquartered in Brookfield, Wis., Fiserv reported $3.4 billion in processing and services revenues for 2004.
Fiserv was ranked the largest provider of information technology services to the U.S. financial services industry in the 2004 FinTech 100 survey by theAmerican Banker newspaper and the Financial Insights research firm. Fiserv can be found on the Internet atwww.fiserv.com.
The disclosure set forth above contains forward-looking statements, specifically Mr. Muma’s and other statements regarding the sale of Fiserv’s securities clearing businesses, estimated revenues and earnings from Fiserv’s transaction with the Australian banks, earnings targets for 2005, future revenues, 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. 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
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FISERV, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (1)
(In thousands, except per share amounts)
(Unaudited)
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| | | Three Months Ended March 31,
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| | | 2005
| | | 2004
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Revenues: | | | | | | | | |
Processing and services | | $ | 882,319 | | | $ | 811,556 | |
Customer reimbursements | | | 90,795 | | | | 97,321 | |
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Total revenues | | | 973,114 | | | | 908,877 | |
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Cost of revenues: | | | | | | | | |
Salaries, commissions and payroll related costs | | | 343,484 | | | | 329,586 | |
Customer reimbursement expenses | | | 90,795 | | | | 97,321 | |
Data processing costs and equipment rentals | | | 51,378 | | | | 52,105 | |
Prescription costs | | | 124,096 | | | | 95,578 | |
Other operating expenses | | | 132,322 | | | | 127,037 | |
Depreciation and amortization | | | 43,023 | | | | 45,912 | |
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Total cost of revenues | | | 785,098 | | | | 747,539 | |
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Operating income | | | 188,016 | | | | 161,338 | |
Interest expense - net | | | (3,662 | ) | | | (4,732 | ) |
Realized gain from sale of investment (2) | | | 43,452 | | | | — | |
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Income from continuing operations, before income taxes | | | 227,806 | | | | 156,606 | |
Income tax provision | | | 88,161 | | | | 60,897 | |
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Income from continuing operations | | | 139,645 | | | | 95,709 | |
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Loss from discontinued operations, net of tax | | | (619 | ) | | | (2,911 | ) |
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Net income | | $ | 139,026 | | | $ | 92,798 | |
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Diluted net income (loss) per share: | | | | | | | | |
Continuing operations (excluding realized gain from sale of investment) | | $ | 0.58 | | | $ | 0.49 | |
Discontinued operations | | | — | | | | (0.01 | ) |
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Total (excluding realized gain from sale of investment) | | | 0.57 | | | | 0.47 | |
Realized gain from sale of investment | | | 0.14 | | | | — | |
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Total | | $ | 0.71 | | | $ | 0.47 | |
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Diluted shares used in computing net income (loss) per share | | | 195,495 | | | | 197,063 | |
| (1) | The securities clearing businesses’ revenues and cost of revenues are excluded above from “Revenues” and “Cost of revenues” and are included above in “Loss from discontinued operations, net of tax” for all periods presented. |
| (2) | Represents the sale of the Company’s remaining 3.2 million shares of Bisys Group, Inc. common stock. |
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
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FISERV, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)
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| | | March 31,
2005
| | | December 31,
2004
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ASSETS | | | | | | | | |
Cash and cash equivalents | | $ | 719,728 | | | $ | 516,127 | |
Accounts receivable – net | | | 466,464 | | | | 437,764 | |
Prepaid expenses and other assets | | | 98,425 | | | | 100,810 | |
Investments | | | 2,589,898 | | | | 1,984,536 | |
Property and equipment | | | 196,336 | | | | 200,709 | |
Intangible assets - net | | | 533,371 | | | | 532,539 | |
Goodwill - net | | | 1,884,526 | | | | 1,859,347 | |
Assets of discontinued operations held for sale | | | — | | | | 2,751,517 | |
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TOTAL | | $ | 6,488,748 | | | $ | 8,383,349 | |
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LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | |
Accounts payable | | $ | 205,816 | | | $ | 202,616 | |
Short-term borrowings | | | 100,000 | | | | 100,000 | |
Accrued expenses | | | 278,835 | | | | 363,513 | |
Accrued income taxes | | | 138,033 | | | | 44,955 | |
Deferred revenues | | | 225,831 | | | | 226,080 | |
Customer funds held and retirement account deposits | | | 2,328,715 | | | | 1,829,639 | |
Deferred income taxes | | | 129,915 | | | | 134,330 | |
Long-term debt | | | 498,812 | | | | 505,327 | |
Liabilities of discontinued operations held for sale | | | — | | | | 2,412,467 | |
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TOTAL LIABILITIES | | | 3,905,957 | | | | 5,818,927 | |
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SHAREHOLDERS’ EQUITY | | | | | | | | |
Preferred stock, no par value:
25,000,000 shares authorized; none issued | | | — | | | | — | |
Common stock, $0.01 par value:
450,000,000 shares authorized;
196,506,575 and 195,940,360 shares issued | | | 1,965 | | | | 1,959 | |
Additional paid-in capital | | | 695,063 | | | | 679,573 | |
Accumulated other comprehensive income | | | (2,777 | ) | | | 26,695 | |
Accumulated earnings | | | 2,059,565 | | | | 1,920,539 | |
Treasury stock, at cost, 4,460,800 and 1,691,500 shares | | | (171,025 | ) | | | (64,344 | ) |
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TOTAL SHAREHOLDERS’ EQUITY | | | 2,582,791 | | | | 2,564,422 | |
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TOTAL | | $ | 6,488,748 | | | $ | 8,383,349 | |
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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
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FISERV, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
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| | | Three months ended
March 31,
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| | | 2004
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CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | | | |
Net income | | $ | 139,026 | | | $ | 92,798 | |
Adjustment for discontinued operations | | | 619 | | | | 2,911 | |
Adjustments to reconcile net income to net cash provided by operating activities from continuing operations: | | | | | | | | |
Realized gain from sale of investment | | | (43,452 | ) | | | — | |
Deferred income taxes | | | 12,068 | | | | 28,395 | |
Depreciation and amortization | | | 43,023 | | | | 45,912 | |
Changes in assets and liabilities, net of effects from acquisitions and dispositions of businesses: | | | | | | | | |
Accounts receivable | | | (25,774 | ) | | | 7,584 | |
Prepaid expenses and other assets | | | 3,874 | | | | (8,568 | ) |
Accounts payable and accrued expenses | | | (46,278 | ) | | | (40,095 | ) |
Deferred revenues | | | (2,723 | ) | | | 5,710 | |
Accrued income taxes | | | 53,802 | | | | 26,720 | |
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Net cash provided by operating activities from continuing operations | | | 134,185 | | | | 161,367 | |
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CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | | |
Capital expenditures, including capitalization of software costs for external customers | | | (31,772 | ) | | | (31,021 | ) |
Payment for acquisitions of businesses, net of cash acquired | | | (96,003 | ) | | | (29,775 | ) |
Proceeds from sale of businesses, net of expenses paid | | | 344,920 | | | | — | |
Cash distribution received from discontinued operations prior to sale | | | 68,000 | | | | — | |
Investments | | | (611,463 | ) | | | (351,274 | ) |
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Net cash used in investing activities from continuing operations | | | (326,318 | ) | | | (412,070 | ) |
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CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | | |
Repayments of long-term debt | | | (7,156 | ) | | | (106,971 | ) |
Issuance of common stock | | | 10,495 | | | | 11,662 | |
Purchases of treasury stock | | | (106,681 | ) | | | — | |
Customer funds held and retirement account deposits | | | 499,076 | | | | 356,073 | |
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Net cash provided by financing activities from continuing operations | | | 395,734 | | | | 260,764 | |
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Change in cash and cash equivalents | | | 203,601 | | | | 10,061 | |
Beginning balance | | | 516,127 | | | | 162,668 | |
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Ending balance | | $ | 719,728 | | | $ | 172,729 | |
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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
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FISERV, INC. AND SUBSIDIARIES
SELECTED SEGMENT INFORMATION(1)
(In thousands, unaudited)
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| | | Three Months Ended March 31,
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| | | 2005
| | 2004
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Processing and services revenues: | | | | | | |
Financial institution outsourcing, systems and services (“Financial”)(2) | | $ | 608,487 | | $ | 574,505 |
Health plan management services (“Health”) | | | 241,085 | | | 206,591 |
Investment support services (“Investment Services”) | | | 32,747 | | | 30,460 |
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Total | | $ | 882,319 | | $ | 811,556 |
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Operating income: | | | | | | |
Financial(2) | | $ | 160,148 | | $ | 138,547 |
Health | | | 22,266 | | | 18,650 |
Investment Services | | | 5,602 | | | 4,141 |
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Total | | $ | 188,016 | | $ | 161,338 |
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| (1) | The securities clearing businesses are reported under discontinued operations and are not included in the segment information above. |
| (2) | Included in the Financial segment information above are early contract termination fees of $14.9 million for the first quarter of 2005, primarily from 6 customers that were acquired by other financial institutions, compared to $14.3 million for the first quarter of 2004 primarily from 2 customers that were acquired by other financial institutions. The Company’s Financial segment includes over 6,000 core financial institution processing customers. This segment’s businesses generally enter into three to five-year contracts with its customers that contain early contract termination fees. These fees can vary significantly from period to period based on the number of terminated contracts and how early in the contract term a contract is terminated. The annual segment revenue loss resulting from these terminated contracts is not material. The Financial segment’s total early contract termination and assignment fees were $5.1 million, $12.3 million and $4.6 million in the second, third and fourth quarters of 2004, respectively. |
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
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FISERV, INC. AND SUBSIDIARIES
SUPPLEMENTAL FINANCIAL INFORMATION
(Unaudited)
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| Free Cash Flow | | Three Months Ended March 31,
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| (In thousands) | | 2005
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Net cash provided by operating activities from continuing operations | | $ | 134,185 | | | $ | 161,367 | |
Capital expenditures, including capitalization of software costs for external customers | | | (31,772 | ) | | | (31,021 | ) |
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Free cash flow | | $ | 102,413 | | | $ | 130,346 | |
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Free cash flow is measured as net cash provided by operating activities from continuing operations less capital expenditures including capitalization of software costs for external customers, as reported in the Company’s condensed consolidated statements of cash flows. 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(1)
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| | | Three months ended March 31,
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Financial | | 5 | % | | 2 | % |
Health | | 14 | % | | 41 | % |
Investment Services | | 8 | % | | (2 | )% |
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TOTAL | | 7 | % | | 10 | % |
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| | | Pro forma(2) Three months ended March 31,
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| | | 2004
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Financial | | 5 | % | | 2 | % |
Health(2) | | 4 | % | | 10 | % |
Investment Services | | 8 | % | | (2 | )% |
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TOTAL(2) | | 5 | % | | 3 | % |
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| (1) | 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 $10 million ($5 million in the Financial segment and $5 million in the Health segment) in the first quarter of 2005 and represents pre-acquisition normalized revenue of acquired companies, less dispositions, for the comparable prior year period. The securities clearing businesses are reported under discontinued operations and are not included in the internal revenue growth percentages by segment information above. |
| (2) | The pro forma internal revenue growth percentages exclude the positive impact of the prescription cost which is included in revenues and cost of revenues in the Health segment. |
Actual and pro forma internal revenue growth percentages are non-GAAP financial measures that the Company believes are useful to investors because they provide a breakdown of internal and acquisition-related revenue growth including and excluding prescription costs in revenue.
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
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