Exhibit 99.1
GLOBAL PAYMENTS REPORTS THIRD QUARTER EARNINGS
ATLANTA, March 31 /PRNewswire-FirstCall/ -- Global Payments Inc. (NYSE: GPN)
today announced results for its third fiscal quarter ended February 28, 2006.
The company's prior period earnings per share results and share amounts reflect
the retroactive effect of its two-for-one stock split, which was completed
through a stock dividend that was distributed on October 28, 2005.
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For the third quarter, revenue grew 15 percent to $225.2 million compared
to $195.5 million in the prior year quarter. Net income grew 39 percent to $30.1
million compared to $21.6 million in the prior year quarter, and diluted
earnings per share grew 33 percent to $0.36 compared to $0.27 in the prior year
quarter.
For the nine months ended February 28, 2006, revenue grew 16 percent to
$669.3 million compared to $576.7 million in the prior year period. Excluding
restructuring charges for the nine months ended February 28, 2006 (see attached
reconciliation schedule), net income grew 34 percent to $92.7 million from $69.4
million in the prior year period, and diluted earnings per share grew 30 percent
to $1.13 from $0.87 in the prior year period.
In accordance with GAAP, the nine month period net income and diluted
earnings per share include restructuring charges of $1.9 million ($1.2 million,
net of tax) and $0.01 per diluted share, respectively, relating to the
completion of a planned operating center consolidation, which was announced in
July 2005. These charges consisted of employee termination benefits and
facility-related closing costs. For the nine months ended February 28, 2006,
GAAP net income and diluted earnings per share were $91.5 million and $1.12,
respectively.
Comments and Outlook
Chairman, President and CEO, Paul R. Garcia, stated, "We are once again
pleased with our solid quarterly financial results, which primarily reflect
continued strength in our North American direct merchant channels and our
DolEx-branded consumer money transfer channel. We also continue to achieve solid
progress toward completing our announced Asia-Pacific joint venture with HSBC.
Based on our results, we are raising our fiscal 2006 annual revenue guidance to
a range of $896 million to $903 million, or 14% to 15% growth versus $784
million in fiscal 2005. We are also raising our fiscal 2006 annual diluted
earnings per share guidance (excluding restructuring and other charges in the
current and prior fiscal year) to a range of $1.48 to $1.51 for growth of 24% to
27% versus $1.19 in fiscal 2005."(1)
Conference Call
Global Payments will hold a conference call today, March 31, 2006 at 10:30
a.m. ET to discuss financial results and business highlights. The conference
call may be accessed by calling 1-888-791-2132 (U.S.) or 1-517-623-4000
(internationally) and using a pass code of "GPN" for both numbers, or via Web
cast at http://www.globalpaymentsinc.com. A replay of the call will be available
on the Global Payments Web site through April 14, 2006.
Global Payments Inc. (NYSE: GPN) is a leading provider of electronic
transaction processing services for consumers, merchants, Independent Sales
Organizations (ISOs), financial institutions, government agencies and multi-
national corporations located throughout the United States, Canada, Latin
America and Europe. Global Payments offers a comprehensive line of processing
solutions for credit and debit cards, business-to-business purchasing cards,
gift cards, electronic check conversion and check guarantee, verification and
recovery including electronic check services, as well as terminal management.
The company also provides consumer money transfer services from the U.S. and
Europe to destinations in Latin America, Morocco and the Philippines. For more
information about the company and its services, visit
http://www.globalpaymentsinc.com.
(1) Fiscal 2005 diluted earnings per share was $1.16 on a GAAP basis,
which reflects restructuring and other charges of $2.4 million, net
of tax, or $0.03 diluted earnings per share.
This announcement and comments made by Global Payments' management during
the conference call may contain forward-looking statements pursuant to the
"safe-harbor" provisions of the Private Securities Litigation Reform Act of
1995. These forward looking statements involve risks and uncertainties such as
product demand, market and customer acceptance, the effect of economic
conditions, competition, pricing, development difficulties, foreign currency
risks, costs of capital, continued certification by credit card associations,
the ability to consummate and integrate acquisitions (including the previously
announced joint venture with HSBC in the Asia-Pacific region), and other risks
detailed in the company's SEC filings, including the most recently filed Form
10-Q or Form 10-K, as applicable. The company undertakes no obligation to revise
any of these statements to reflect future circumstances or the occurrence of
unanticipated events.
Contact: Jane M. Forbes
770-829-8234 Voice
770-829-8267 Fax
investor.relations@globalpay.com
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands, except per share data)
Three Months Ended
February 28,
----------------------------
2006 2005
------------ ------------
Revenues $ 225,159 $ 195,526
Operating expenses:
Cost of service 88,863 87,378
Sales, general and administrative 88,161 69,929
177,024 157,307
Operating income 48,135 38,219
Other income (expense):
Interest and other income 2,172 793
Interest and other expense (1,695) (2,969)
477 (2,176)
Income before income taxes and
minority interest 48,612 36,043
Provision for income taxes (16,577) (12,716)
Minority interest, net of tax (1,924) (1,704)
Net income $ 30,111 $ 21,623
Earnings per share:
Basic $ 0.38 $ 0.28(1)
Diluted $ 0.36 $ 0.27(1)
Weighted average shares outstanding:
Basic 79,219 77,412(1)
Diluted 82,771 80,206(1)
(1) All share and per share amounts reflect the retroactive effect of the
company's two-for-one stock split.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands, except per share data)
Nine Months Ended
February 28,
----------------------------
2006 2005
------------ ------------
Revenues $ 669,288 $ 576,666
Operating expenses:
Cost of service 268,957 247,168
Sales, general and administrative 249,766 208,887
Restructuring 1,878 -
520,601 456,055
Operating income 148,687 120,611
Other income (expense):
Interest and other income 4,606 1,509
Interest and other expense (5,017) (6,446)
(411) (4,937)
Income before income taxes and
minority interest 148,276 115,674
Provision for income taxes (50,562) (40,812)
Minority interest, net of tax (6,252) (5,463)
Net income $ 91,462 $ 69,399
Earnings per share:
Basic $ 1.16 $ 0.90(1)
Diluted $ 1.12 $ 0.87(1)
Weighted average shares outstanding:
Basic 78,660 76,896(1)
Diluted 81,892 79,468(1)
(1) All share and per share amounts reflect the retroactive effect of the
company's two-for-one stock split.
CONSOLIDATED CONDENSED BALANCE SHEETS
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands)
February 28, May 31,
2006 2005
------------ ------------
(Unaudited)
Assets
Cash and cash equivalents $ 213,143 $ 48,979
Accounts receivable, net 59,892 54,932
Claims receivable, net 1,058 937
Settlement processing assets 21,790 63,435
Other current assets 22,232 21,707
Current assets 318,115 189,990
Property and equipment, net 102,730 104,173
Goodwill 382,475 372,744
Other intangible assets, net 168,075 175,006
Other assets 10,591 11,592
Total assets $ 981,986 $ 853,505
Liabilities & Shareholders' Equity
Line of credit $ - $ 50,000
Line of credit with CIBC - 8,606
Settlement processing obligations 72,087 27,394
Payable to money transfer beneficiaries 7,488 5,694
Accounts payable and other accrued
liabilities 85,312 88,067
Notes payable - 1,347
Obligations under capital leases-
current portion 1,127 1,695
Current liabilities 166,014 182,803
Obligations under capital leases - 746
Other accrued liabilities 85,559 75,266
Total liabilities 251,573 258,815
Minority interest in equity of
subsidiaries 12,956 16,340
Shareholders' equity 717,457 578,350
Total liabilities &
shareholders' equity $ 981,986 $ 853,505
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands)
Nine Months
Ended February 28,
----------------------------
2006 2005
------------ ------------
Cash flows from operating activities:
Net income $ 91,462 $ 69,399
Non-cash items
Depreciation and amortization 30,676 33,394
Minority interest in earnings 6,252 5,516
Other, net 25,823 25,441
Changes in working capital, which
provided (used) cash
Settlement processing 83,572 51,159
Other, net (9,726) 3,118
Net cash provided by
operating activities 228,059 188,027
Cash flows from investing activities:
Capital expenditures (17,835) (27,639)
Business acquisitions, net of
cash acquired (3,379) (30,490)
Net cash used in investing
activities (21,214) (58,129)
Cash flows from financing activities:
Net payments on line of credit (50,000) (36,400)
Net payments on line of credit
with CIBC (8,606) (72,766)
Principal payments under capital
leases and other notes (2,661) (9,755)
Net stock issued to employees
under stock plans and dividends 15,724 13,350
Distributions to minority interests (7,889) (7,507)
Net cash used in financing
activities (53,432) (113,078)
Effect of exchange rate changes on cash 10,751 6,910
Increase in cash and cash equivalents 164,164 23,730
Cash and cash equivalents, beginning
of period 48,979 34,472
Cash and cash equivalents, end of
period $ 213,143 $ 58,202
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands, except per share data)
2006 2005
Nine Months Ended February 28, Normalized Restructuring (1) GAAP GAAP
- --------------------------------- ------------ ---------------- ------------ ------------
Revenue $ 669,288 $ - $ 669,288 $ 576,666
Operating expenses:
Cost of service 268,957 - 268,957 247,168
Sales, general and
administrative 249,766 - 249,766 208,887
Restructuring - 1,878 1,878 -
518,723 1,878 520,601 456,055
Operating income 150,565 (1,878) 148,687 120,611
Other income/(expense):
Interest and other income 4,606 - 4,606 1,509
Interest and other expense (5,017) - (5,017) (6,446)
(411) - (411) (4,937)
Income before income taxes 150,154 (1,878) 148,276 115,674
Provision for income taxes (51,202) 640 (50,562) (40,812)
Minority interest, net of tax (6,252) - (6,252) (5,463)
Net income $ 92,700 $ (1,238) $ 91,462 $ 69,399
Basic shares 78,660 - 78,660 76,896(2)
Basic earnings per share $ 1.18 $ (0.02) $ 1.16 $ 0.90(2)
Diluted shares 81,892 - 81,892 79,468(2)
Diluted earnings per share $ 1.13 $ (0.01) $ 1.12 $ 0.87(2)
(1) Relates to severance and facility related costs resulting from planned
facility closures, as well as the related income tax benefit.
(2) All share and per share amounts reflect the retroactive effect of the
company's two-for-one stock split.
SOURCE Global Payments Inc.
-0- 03/31/2006
/CONTACT: Jane M. Forbes of Global Payments Inc., +1-770-829-8234, or
fax, +1-770-829-8267, or investor.relations@globalpay.com/
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