Exhibit 99.1
TSYS News Release
- --------------------------------------------------------------------------------
For Immediate Release
Contacts:
James B. Lipham Leo S. Berard
Chief Financial Officer Investor Relations
706.649.2262 706.649.5220
TSYS Reports 15.9% Increase in Net Income for First Quarter 2003
Announces Plan to Repurchase Up to 2 Million Shares Held by the Public
Columbus, Ga., April 15, 2003 -- TSYS(R) today announces that its
financial results are in line with the Company's forecast for the three months
ended March 31, 2003.
Net income for the quarter ending March 31, 2003 increased 15.9% to
$31.7 million from $27.4 million in the same period last year. Basic and diluted
earnings per share for the first quarter increased to $0.16 from $0.14 in the
same period last year. Revenue for the first quarter was $251.4 million, an
increase of 10.3%, compared with revenue of $227.9 million one year ago. Revenue
for the first quarter of 2003, excluding the amounts for reimbursable charges,
was $192.9 million, an increase of 12.9%, compared to $170.8 million in the same
period last year.
The growth in revenues was driven by the increase in electronic payment
processing revenues, which represent approximately 87% of TSYS' revenues before
reimbursables. Electronic payment processing revenues were $167.8 million, an
increase of 17.2%, compared to $143.2 million in the same period last year. The
growth in electronic payment processing was driven by the inclusion of new
business not present in the first quarter of 2002, the continued growth of
enhanced services and the internal growth of existing clients.
"TSYS had another solid quarter and expects another record year in 2003
while celebrating the company's 20th anniversary," said Richard W. Ussery,
chairman and CEO of TSYS. "The strength of the quarter focuses on our core
business. The major contributors to our growth for the quarter were strong
internal growth from our existing customers of approximately 10%, the successful
conversions of international clients, the inclusion of new business and the
continued cross sell opportunities as evidenced by 36.5% growth from our value
added services."
Ussery continued, "During the first quarter of 2003:
* Bank One selected TSYS to upgrade its credit card processing.
Under the long term software licensing and services agreement,
TSYS will provide bankcard processing services to Bank One's
credit card accounts for at least two years starting in mid 2004
(excluding statement and card production services), and then
license its TS2 consumer and commercial software to Bank One
under a perpetual license with a six year payment term. Under the
percentage-of-completion accounting method
-more-
TSYS Announces 15.9% Increase for First Quarter 2003 Earnings/Page 2 of 7
required under the arrangement, TSYS will recognize revenue in
2003. These revenues will be recognized in proportion to costs
incurred and are expected to generate margins consistent with
the Company's processing business. The impact upon 2003 earnings
will be slightly positive. The 2004 EPS contribution from the
Bank One agreement is expected to range from $0.03 to $0.04.
Beginning in 2005 and continuing thereafter through the payment
term of the license, the EPS contribution of the Bank One
agreement is expected to exceed $0.04 on an annual basis. This
contract is expected to have a positive impact on cash flows
every year throughout the term of the agreement.
* Pitney Bowes chose TSYS to process more than 1.5 million postage
payment and credit accounts in the United States, the United
Kingdom and Canada. Conversion of these accounts to the TSYS
platform will be completed in two phases in 2003 and 2004.
* Sears selected TSYS Invoice Billing capability for its commercial
cards. Invoice Billing is also a significant benefit to the
retailer because it essentially provides them with an
invoice-level billing system for their commercial retail
customer. This functionality increases TSYS' penetration into the
business-to- business bill and invoice market valued at $8.5
trillion -- more than three times the consumer-bill-payment
market at $2.6 trillion, according to Tower Group.
* TSYS successfully converted 5 million CIBC accounts and 750,000
Barclaycard account portfolios.
"Our underlying fundamental business is as strong as it has ever been
in the history of the company; our customers continue to grow organically at 10
- - 12 %; the fundamental shift to electronic payments continues to thrive driving
incremental transaction growth; our competitive advantages in technology and
service poise TSYS to gain market share both domestically and abroad; and we
have opportunities to leverage our core competencies into new non-card markets,"
said Ussery.
Sears announced that it is evaluating strategic alternatives for the
company's private label and MasterCard portfolio. TSYS and Sears are parties to
a 10-year agreement, which was renewed in January of 2000, under which TSYS
provides transaction processing for more than 75 million Sears' accounts. If
Sears does sell its portfolio, TSYS has significant termination provisions
embedded within the processing agreement in the event of an early termination
without cause. Sears represents less than 10% of TSYS revenues.
TSYS also today announces that its board has approved a stock
repurchase plan to purchase up to 2 million shares, which represents slightly
more than five percent of the shares of TSYS stock held by shareholders other
than Synovus Financial Corp. This equates to approximately $32 million of TSYS
stock based upon current market prices. The shares will be purchased from time
to time over the next two years at prices considered attractive to management.
Repurchased shares will be used for general corporate purposes.
TSYS today also reaffirms that it expects its 2003 net income to exceed
its 2002 net income by 12-15%. The assumptions underlying 2003's net income
forecast are an increase in revenues (excluding reimbursables) between 9-10%, an
internal growth rate of accounts of existing clients of approximately 11% and a
continued focus on expense management.
TSYS will host its quarterly conference call at 4:30 p.m. EDT, April
15, 2003. The conference call can be accessed at www.tsys.com by clicking on the
designated icon within the Highlights section of the site. The replay will be
available 30-45 minutes after the call.
-more-
TSYS Announces 15.9% Increase for First Quarter 2003 Earnings/Page 3 of 7
About TSYS
TSYS (NYSE: TSS) (www.tsys.com) brings integrity and innovation to the
world of electronic payment services as the integral link between buyers and
sellers in this rapidly evolving universe. Synovus (NYSE: SNV) owns an
81-percent interest in TSYS. For more information, contact news@tsys.com.
This press release contains statements that constitute "forward-looking
statements" within the meaning of the Securities Act of 1933 and the Securities
Exchange Act of 1934 as amended by the Private Securities Litigation Reform Act
of 1995. These forward-looking statements include, among others, statements
regarding the expected margins generated by the Bank One contract, the projected
impact of TSYS' agreement with Bank One on its earnings per share for 2004 and
2005 and thereafter through the payment term of the license, the expected impact
on cash flows of the Bank One contract and TSYS' expected growth in net income
for 2003 and the assumptions underlying such statements, including, with respect
to TSYS' expected increase in net income for 2003; an increase in revenues
(excluding reimbursables) between 9-10%; an internal growth rate of accounts of
existing clients of approximately 11%; and continued aggressive expense
management. Prospective investors are cautioned that any such forward-looking
statements are not guarantees of future performance and involve risks and
uncertainties, and that actual results may differ materially from those
contemplated by such forward-looking statements. A number of important factors
could cause actual results to differ materially from those contemplated by the
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, delays in converting Bank One's accounts to its platforms; TSYS is
unable to modify its software to meet Bank One's specifications; TSYS is unable
to control its costs; changes occur in accounting literature and
interpretations; TSYS' software is unable to perform in Bank One's operating
environment; TSYS' number of outstanding shares increases; revenues are lower
than anticipated; internal growth rates for TSYS' existing customers are lower
than anticipated; TSYS is unable to control expenses and increase market share;
hostilities increase in the Middle East or elsewhere; adverse developments with
respect to the credit card industry in general; TSYS is unable to successfully
manage any impact from slowing economic conditions or consumer spending; adverse
developments with respect to sub-prime or retail clients; and overall market
conditions. Additional factors that could cause actual results to differ
materially from those contemplated in this press release can be found in TSYS'
filings with the Securities and Exchange Commission, including its Annual Report
on Form 10-K, quarterly reports on Form 10-Q, 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.
-more-