Exhibit 99.1
NEWS RELEASE
FOR MORE INFORMATION CONTACT:
David E. Fountain
National Processing, Inc.
Phone: 502.315.3311
Fax: 502.315.3535
e-mail: dfountain@npc.net
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Website: www.npc.net
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FOR IMMEDIATE RELEASE
NATIONAL PROCESSING REPORTS FIRST QUARTER FINANCIAL RESULTS
LOUISVILLE, KENTUCKY, APRIL 16, 2003 - National Processing, Inc. (NYSE: NAP)
today reported financial results for the first quarter of 2003. Revenue for the
first quarter of 2003 was $106.0 million, down 4% from 2002 first quarter
revenue of $109.9 million. Net income for the first quarter of 2003 was $8.5
million, or $0.16 per diluted share, down 29% from 2002 first quarter amounts of
$12.0 million, or $0.23 per diluted share.
Merchant Card Services transaction and dollar volume increased to record first
quarter levels. Merchant Card Services transactions processed were 952 million
for the first quarter of 2003, representing an increase of 8% over the first
quarter of 2002. Merchant Card Services dollar volume processed was $39.5
billion for the first quarter of 2003, representing an increase of 1% over the
first quarter of 2002.
Chairman and CEO Jon L. Gorney commented, "The first quarter financial results
were in line with our expectations. Our results were clearly affected by a
number of items including re-pricings in the national merchant sector, weak
consumer spending, higher expense levels due to some recent investments in our
business, and our decision to exit merchant processing for the airlines. Our
earnings outlook for the remainder of the year is consistent with our previous
guidance. Our full year EPS estimate is $0.90 to $0.95. We have revised our full
year revenue estimate based on the weakness we are seeing in consumer spending
and current economic uncertainties. Our new revenue range is $420-$440 million
for the full year. Consumer spending will be a key driver in terms of where we
fall within this revenue range."
"The company's strategies are geared toward long-term growth. We will not
compromise long-term objectives for short-term gains. During the first three
months of the year we have focused on increasing the acquisition and retention
of small to medium sized merchants, which is where we have the best opportunity
for strong margins. The merchant revenue from our ISO business increased by 25%
over last year as we continued to expand our ISO relationships. We have
realigned our sales channels to enhance the synergy between our national and
regional merchants from both a back-office and product prospective. In addition,
we have created a new dedicated Product Management team to execute our vision of
being a single-source provider for our customers through expanded product
offerings. We are also committed to aggressively managing our costs to keep them
in line with business volumes. We will continue to focus on initiatives such as
these to help position the company for long-term growth."
The Company's balance sheet remained strong. As of March 31, 2003, the Company
had $229.4 million of cash and cash equivalents with no debt and total
stockholders' equity of $466.1 million.
Operating cash flow and capital expenditures were $46.7 million and $1.7
million, respectively, for the first quarter of 2003.
CONFERENCE CALL
A conference call to discuss financial results and business highlights will be
held at 9:00 a.m. ET today hosted by Jon L. Gorney, chief executive officer, and
David E. Fountain, chief financial officer. The call will be open to the public
with both media and individual investors invited to participate in a listen-only
mode. The conference can be accessed by calling 888.428.4480 (domestic) and
612.288.0337 (international). Participants should plan to dial in approximately
15 minutes prior to the start of the call.
A replay of the live call will be available starting at 2:15 p.m. ET, April 16,
2003 through Midnight ET on April 18, 2003. The replay may be accessed by
dialing 800.475.6701 (domestic) and 320.365.3844 (international) and entering
access code 662003.
FORWARD-LOOKING STATEMENTS
This announcement and Mr. Gorney'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. Additional information concerning factors that could cause actual
results to differ materially from those contained in forward-looking statements
is available in the Company's Annual Report on Form 10-K for the year ended
December 31, 2002 and subsequent filings with the Securities and Exchange
Commission.
ABOUT NATIONAL PROCESSING, INC.
National Processing, Inc. (NYSE: NAP) through its wholly owned operating
subsidiary, National Processing Company, LLC (NPC(R)), is a leading provider of
merchant credit and debit card processing. National Processing is 85 percent
owned by National City Corporation (NYSE: NCC) (www.nationalcity.com), one of
the nation's largest financial holding companies. NPC supports over 645,000
merchant locations, representing nearly one out of every five Visa(R) and
MasterCard(R) transactions processed nationally. NPC's card processing solutions
offer superior levels of service and performance and assist merchants in
lowering their total cost of card acceptance through world-class people,
technology, and service. Additional information regarding National Processing
can be obtained at www.npc.net.
NATIONAL PROCESSING, INC.
Financial Summary
(In thousands, except per share amounts)
(Unaudited)
INCOME STATEMENT:
QUARTER ENDED MARCH 31,
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2003 2002 % CHANGE
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Revenue $ 105,954 $ 109,945 -4%
Operating expenses 82,752 82,304 1%
General and administrative expenses 4,306 4,602 -6%
Depreciation and amortization 4,967 4,023 23%
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EARNINGS BEFORE INTEREST AND TAXES 13,929 19,016 -27%
Net interest income 842 1,035 -19%
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INCOME BEFORE TAXES AND MINORITY INTEREST 14,771 20,051 -26%
Provision for income taxes 5,695 7,416 -23%
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INCOME BEFORE MINORITY INTEREST 9,076 12,635 -28%
Minority Interest 529 587 -10%
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NET INCOME $ 8,547 $ 12,048 -29%
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NET INCOME PER SHARE - BASIC $ 0.164 $ 0.232 -29%
Net income per share - diluted $ 0.163 $ 0.229 -29%
WEIGHTED AVERAGE SHARES - BASIC 52,145 51,860
WEIGHTED AVERAGE SHARES - DILUTED 52,306 52,554
SHARES OUTSTANDING AT END OF PERIOD 52,224 51,979
BALANCE SHEET: MARCH 31, DECEMBER 31, MARCH 31,
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2003 2002 2002
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Cash and cash equivalents $ 229,390 $ 185,513 $ 155,436
Accounts receivable - trade 111,800 152,132 112,083
Other current assets 11,744 9,400 10,992
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TOTAL CURRENT ASSETS 352,934 347,045 278,511
Property and equipment 107,044 105,369 104,679
Accumulated depreciation (54,822) (51,662) (50,767)
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Net property and equipment 52,222 53,707 53,912
Goodwill 91,227 91,227 91,227
Other intangible assets 40,220 41,990 43,282
Other assets 15,004 16,535 17,203
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TOTAL ASSETS $ 551,607 $ 550,504 $ 484,135
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Accounts payable - trade $ 19,865 $ 23,006 $ 15,037
Other current liabilities 63,430 66,921 50,637
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TOTAL CURRENT LIABILITIES 83,295 89,927 65,674
Minority interest 550 2,462 1,414
Other liabilities 1,699 1,732 1,829
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TOTAL LIABILITIES 85,544 94,121 68,917
SHAREHOLDERS' EQUITY 466,063 456,383 415,218
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 551,607 $ 550,504 $ 484,135
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