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EXHIBIT 99.1
FOR INFORMATION CONTACT:
David E. Fountain Thomas A. Richlovsky
Chief Financial Officer Investor Relations
(502) 315-3311 (216) 575-2126
For Immediate Release
NATIONAL PROCESSING REPORTS RECORD FIRST QUARTER EARNINGS
LOUISVILLE, KENTUCKY--April 17, 2000--National Processing, Inc.
(NYSE:NAP) today reported record financial results for the first quarter of
2000. Net income for the quarter was $9.5 million, or $0.19 per share. This
represents a 53% increase over comparable core business net income for the same
quarter of 1999. Revenue from the Company's core business units was $97.9
million for the 2000 quarter, up 16% from $84.7 million for core business units
in the 1999 first quarter.
For the first quarter of 1999, reported net loss was $68.2 million, or
$1.35 per share. This reported net loss contained restructuring and impairment
charges that reduced reported results by $73.9 million. Excluding these charges,
net income was $5.7 million, or $0.11 per share.
Core business units include Merchant Card Services and Corporate
Outsourcing Solutions and exclude business lines divested in the first half of
1999 (Freight, Payables, Remittance and Check Services).
SUMMARY FINANCIAL INFORMATION
(dollars in millions, except per share amounts)
Quarter Ended March 31, % Change
----------------------- versus Prior
2000 1999 Year
---- ---- ----
CORE BUSINESS UNITS
Revenue $97.9 $ 84.7 16%
Net Income Excluding Nonrecurring Items (b) $ 9.5 $ 6.2 53%
Net Income per Share Excluding Nonrecurring Items (b) $0.19 $ 0.12 53%
EBIT Excluding Nonrecurring Items (a) $13.6 $ 9.7 41%
EBIT Margin Excluding Nonrecurring Items (a) 13.9% 11.4% 22%
REPORTED
Net Income Excluding Nonrecurring Items (b) $ 9.5 $ 5.7 68%
Net Income per Share Excluding Nonrecurring Items (b) $0.19 $ 0.11 68%
Net Income (Loss) $ 9.5 $(68.2) NM
Net Income (Loss) per Share $0.19 $(1.35) NM
EBIT Excluding Nonrecurring Items (a) $13.6 $ 9.0 52%
EBIT Margin Excluding Nonrecurring Items (a) 13.9% 7.2% 93%
<FN>
Notes:
(a) EBIT is defined as earnings before interest and taxes. Excluded for 1999
are nonrecurring items such as restructuring charges, impairment charges
and other items which are summarized in the attached Financial Summary.
(b) Excludes the impact of nonrecurring items referred to in note (a) above for 1999.
NM - Not meaningful
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SUMMARY FINANCIAL HIGHLIGHTS
- - First quarter net income per share increased to record levels - $0.19 for
the quarter ended March 31, 2000, a 53% improvement on a year over year
core business comparison.
- - Revenue for the first quarter, which was derived solely from the Company's
core business units - Merchant Card Services and Corporate Outsourcing
Solutions, rose to $97.9 million, a 16% increase over core revenue from the
same business units for the first quarter of 1999.
- - Revenue for the Merchant Card Services business line, currently the largest
business line, was $70.9 million for the quarter ended March 31, 2000, an
increase of 20% over the comparable period for 1999 and represented 72% of
total Company revenue for the quarter.
- - EBIT for the Company's core business units increased to $13.6 million for
the quarter ended March 31, 2000, a 41% increase over the comparable 1999
period.
- - EBIT for the Merchant Card Services business line increased 95% for the
quarter ended March 31, 2000 over the comparable 1999 period.
"We are extremely pleased with our outstanding first quarter results.
The record earnings again support that our strategy to divest four business
lines in 1999 and focus exclusively on our merchant card and outsourcing
business lines is working," stated Tom A. Wimsett, President and CEO. "Our
strong year over year volume and revenue growth of 27% and 20%, respectively in
our merchant card business line reflects the momentum that we have built and the
resulting market share that we are capturing. In addition, our dual strategy of
focusing on both national and regional merchants has provided us with both the
scale required to achieve a superior cost structure and the opportunity for
continued margin improvement as we leverage our infrastructure and aggressively
expand into the higher margin regional merchant segment."
Mr. Wimsett also stated that the Company is continuing to focus on
e-commerce initiatives and that the Company launched a new web site on April 13.
The Company's web site can be visited at www.npc.net. "This site consists of
approximately 100 pages of content with several full color images, graphical
navigation aids, and hyperlinks to National City Corporation as well as many
technology partners of NPC," stated Wimsett. "The site contains general
information about the credit card processing industry as well as specific data
regarding each of our business lines and product offerings. In addition, we have
added an application feature allowing merchants to subscribe on-line for our
processing services."
National Processing continues to have a healthy, debt-free balance
sheet. As of March 31, 2000, the Company had approximately $121 million of cash
and marketable securities, which places the Company in a strong position to
execute its strategic initiatives.
This announcement and Mr. Wimsett's comments contain forward-looking
statements that involve significant risks and uncertainties including changes in
general economic and financial market conditions and the Company's ability to
execute its business plans. Although management believes the expectations
reflected in such forward-looking statements are reasonable, actual results may
differ materially.
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National Processing, Inc. is a leading provider of merchant credit card
processing services and corporate outsourcing solutions. Approximately one out
of every six Visa and MasterCard transactions in the United States is processed
by National Processing. The Company is 88 percent owned by National City
Corporation (NYSE:NCC).
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NATIONAL PROCESSING, INC.
FINANCIAL SUMMARY
(In thousands, except per share amounts)
(Unaudited)
QUARTER ENDED MARCH 31: Percent
2000 1999 Change
--------------- -------------- -----------
Revenue:
Core Business Units $ 97,867 $ 84,714 16
Divested Business Units - 39,749 NM
--------------- --------------
Total Revenue $ 97,867 $ 124,463 (21)
=============== ==============
Income:
Excluding Nonrecurring Items:
Pre-Tax Income $ 15,446 $ 8,995 72
Tax Expense 5,898 3,321 78
--------------- --------------
Net Income $ 9,548 $ 5,674 68
=============== ==============
Per Share (a) $ 0.19 $ 0.11 68
=============== ==============
Nonrecurring Items (b):
Pre-Tax Loss $ - $ (76,166) NM
Tax Benefit - (2,307) NM
--------------- --------------
Net Income Impact $ - $ (73,859) NM
=============== ==============
Per Share $ - $ (1.46) NM
=============== ==============
Total:
Pre-Tax Income (Loss) $ 15,446 $ (67,171) NM
Tax Expense 5,898 1,014 NM
--------------- --------------
Net Income (Loss) $ 9,548 $ (68,185) NM
=============== ==============
Per Share $ 0.19 $ (1.35) NM
=============== ==============
Revenue $ 97,867 $ 124,463 (21)
Operating expenses 47,464 60,497 (22)
Wages and other personnel expenses 19,218 31,096 (38)
General and administrative expenses 12,181 16,807 (28)
Depreciation and amortization 5,373 7,086 (24)
Nonrecurring items, net (b) - 76,166 NM
--------------- --------------
EARNINGS (LOSS) BEFORE INTEREST AND TAXES 13,631 (67,189) NM
Net interest income 1,815 18 NM
--------------- --------------
Income (loss) before income taxes 15,446 (67,171) NM
Provision for income taxes 5,898 1,014 NM
--------------- --------------
NET INCOME (LOSS) $ 9,548 $ (68,185) NM
=============== ==============
NET INCOME (LOSS) PER SHARE-DILUTED $ 0.19 $ (1.35) NM
=============== ==============
Shares used in computation 50,844 50,645 -
<FN>
Notes:
------
(a) The quarter ended March 31, 1999 includes net loss of $0.01 per
share related to the business units divested in 1999. There was no
impact to the quarter ended March 31, 2000 from the divested
business units.
(b) Nonrecurring items for the quarter ended March 31, 1999 include
impairment losses of $73,932 ($72,030 after-tax) related to the
business units that were divested in the first half of 1999
(Freight, Payables, Remittance and Check Services). Also included
are restructuring charges of $2,234 ($1,829 after-tax) recorded in
the 1999 first quarter for closure and relocation of certain
facilities.
Certain items have been reclassified in the Financial Summary for prior
periods to conform with the 2000 presentation. These reclassifications
had no effect on previously reported net income.
Certain amounts may not recompute due to rounding.
NM - Not meaningful