ATLANTA, July 26 /Xinhua-PRNewswire/ -- Global Payments Inc. (NYSE: GPN) today announced results for its fourth quarter and fiscal year ended May 31, 2007. For the fourth quarter, revenue grew 17 percent to $280.1 million compared to $238.8 million in the prior year. Excluding the impact of current period restructuring and other charges and stock option expense, diluted earnings per share grew 10 percent to $0.45 compared to $0.41 in the prior year quarter.
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For the 2007 fiscal year, revenue grew 17 percent to $1,061.5 million compared to $908.1 million in the prior year period. Excluding the impact of stock option expense in the current period and restructuring and other charges in both periods, diluted earnings per share grew 21 percent to $1.87 from $1.54 in the prior year period.
In accordance with GAAP, the current quarter and year-to-date periods, as well as the prior year-to-date period, include certain restructuring and other charges (see attached reconciliation schedule) primarily relating to operating center consolidations announced in March 2007 and July 2005, respectively. These charges are reflected in our GAAP diluted earnings per share amounts. Additionally, both the current quarter and year-to-date periods include the recognition of stock option expenses as a result of the company's June 1, 2006 adoption of Statement of Financial Accounting Standards No. 123( R ) using the modified prospective method. For the three and twelve months ended May 31, 2007, GAAP diluted earnings per share were $0.40 and $1.75, respectively, compared to $0.41 and $1.53, respectively, in the prior year comparable periods.
Comments and Outlook
Chairman, President and CEO, Paul R. Garcia, stated, "Our solid fiscal 2007 results and accomplishments demonstrate continued success in our merchant services segment. This revenue growth was primarily driven by expansion in our domestic ISO channel, as well as the favorable impact from our July 2006 addition of our Asia-Pacific joint venture with HSBC. In addition, our Canadian merchant services channel benefited from a favorable Canadian currency exchange rate, as well as from certain card association incentives. Our merchant services segment growth also benefited from cost reductions and operating efficiencies achieved during the prior year. Lastly, our money transfer segment met our near-term expectations for the year, which reflect the continued unfavorable impact of a competitive domestic pricing environment and the year-over-year impact of strong results in our prior year."
"For our fiscal 2007 fourth quarter, our merchant services segment delivered solid results, with revenue growth improvements in both the United States and Europe. Our money transfer segment performed as expected for the fourth quarter due to a continuation of the trends discussed above. We expect our money transfer segment growth to rebound during the second half of fiscal 2008, as we annualize the impact of these trends."
"Based on these results and trends, we are providing annual fiscal 2008 revenue guidance of $1,168 million to $1,220 million. This revenue guidance reflects an expected 10 percent to 15 percent growth versus $1,061.5 million in fiscal 2007. In addition, we are providing annual fiscal 2008 diluted earnings per share guidance of $1.85 to $1.94, or 5 percent to 10 percent growth versus $1.77 in fiscal 2007. (1) This includes the impact of stock option expenses as a result of our June 1, 2006 adoption of FAS 123R. Our guidance excludes the impact of future significant acquisitions, and these earnings per share ranges exclude the impact of potential restructuring and other charges," said Garcia.
Conference Call
Global Payments will hold a conference call today, July 26, 2007 at 10:30 a.m. ET to discuss financial results and business highlights. The conference call may be accessed by calling 1-877-352-5208 (U.S.) or 1-210-234-0000 (internationally) and using a pass code of "GPN" for both numbers, or via Web cast at www.globalpaymentsinc.com. A replay of the call will be available on the Global Payments Web site through August 9, 2007.
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, Europe and the Asia-Pacific region. 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 www.globalpaymentsinc.com.
(1) Fiscal 2007 diluted earnings per share was $1.75 on a GAAP basis,
which includes restructuring and other charges equivalent to $0.02 in
diluted earnings per share.
This announcement and comments made by Global Payments' management during the conference call contain certain forward-looking statements within the meaning of the "safe-harbor" provisions of the Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including revenue and earnings estimates and management's expectations regarding future events and developments, are forward looking statements and are subject to significant risks and uncertainties. Among the important factors that may cause actual events or results to differ materially from those anticipated by such forward-looking statements include the following: continued certification by credit card associations, foreign currency risks, competition, pricing, product demand, market and customer acceptance, development difficulties, the effect of economic conditions and consumer spending, security breaches or system failures, costs of capital, changes in state, federal or foreign laws and regulations affecting the consumer electronic money transfer industry, increases in credit card association fees, utility or system interruptions, the ability to consummate and integrate acquisitions, 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.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands, except per share data)
Three Months Ended May 31,
2007 2006
Revenues $280,100 $238,768
Operating expenses:
Cost of service 107,326 89,062
Sales, general and
administrative 118,620 97,305
Restructuring and other 3,088 -
229,034 186,367
Operating income 51,066 52,401
Other income (expense):
Interest and other income 4,654 2,970
Interest and other expense (2,166) (2,127)
2,488 843
Income before income taxes and
minority interest 53,554 53,244
Provision for income taxes (17,687) (16,960)
Minority interest, net of tax (2,689) (2,222)
Net income $33,178 $34,062
Earnings per share:
Basic $0.41 $0.43
Diluted $0.40 $0.41
Weighted average shares outstanding:
Basic 80,617 79,511
Diluted 82,015 82,912
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands, except per share data)
Year Ended May 31,
2007 2006
Revenues $1,061,523 $908,056
Operating expenses:
Cost of service 414,837 358,020
Sales, general and administrative 425,509 347,070
Restructuring and other 3,088 1,878
843,434 706,968
Operating income 218,089 201,088
Other income (expense):
Interest and other income 16,706 7,576
Interest and other expense (8,464) (7,144)
8,242 432
Income before income taxes and
minority interest 226,331 201,520
Provision for income taxes (73,436) (67,522)
Minority interest, net of tax (9,910) (8,474)
Net income $142,985 $125,524
Earnings per share:
Basic $1.78 $1.59
Diluted $1.75 $1.53
Weighted average shares outstanding:
Basic 80,229 78,874
Diluted 81,822 82,149
CONSOLIDATED CONDENSED BALANCE SHEETS
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands)
May 31, May 31,
2007 2006
(Unaudited)
Assets
Cash and cash equivalents $308,872 $218,475
Accounts receivable, net 76,168 67,476
Claims receivable, net 2,187 903
Settlement processing assets 32,853 39,671
Other current assets 24,349 21,881
Current assets 444,429 348,406
Property and equipment, net 118,495 107,977
Goodwill 451,244 387,280
Other intangible assets, net 175,620 167,182
Other assets 10,841 7,833
Total assets $1,200,629 $1,018,678
Liabilities and Shareholders' Equity
Settlement processing obligations $20,617 $37,942
Payable to money transfer
beneficiaries 6,589 6,361
Accounts payable and other accrued
liabilities 115,671 104,606
Obligations under capital leases - 746
Current liabilities 142,877 149,655
Other long-term liabilities 85,043 85,804
Total liabilities 227,920 235,459
Minority interest in equity of
subsidiaries 14,933 12,996
Shareholders' equity 957,776 770,223
Total liabilities and
shareholders' equity $1,200,629 $1,018,678
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands)
Year Ended May 31,
2007 2006
(Unaudited)
Cash flows from operating activities:
Net income $142,985 $125,524
Non-cash items
Restructuring and other charges 1,145 -
Depreciation and amortization 40,365 40,489
Minority interest in earnings 9,214 8,474
Other, net 36,227 29,425
Changes in working capital, which
(used) provided cash
Settlement processing (13,937) 31,198
Other, net (24,867) (337)
Net cash provided by
operating activities 191,132 234,773
Cash flows from investing activities:
Capital expenditures (35,374) (25,038)
Business acquisitions, net of cash
acquired (81,261) (4,917)
Net cash used in investing
activities (116,635) (29,955)
Cash flows from financing activities:
Net payments on lines of credit - (58,606)
Principal payments under capital
leases and other notes (746) (3,042)
Net stock issued to employees
under stock plans and dividends 20,385 17,586
Distributions to minority
interests (8,753) (10,212)
Net cash provided by (used
in) financing activities 10,886 (54,274)
Effect of exchange rate changes on
cash 5,014 18,952
Increase in cash and cash equivalents 90,397 169,496
Cash and cash equivalents, beginning
of period 218,475 48,979
Cash and cash equivalents, end of
period $308,872 $218,475
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
Reconciliation to Exclude Stock Option Expenses and Restructuring and
Other Charges from Normalized Results
(In thousands, except per share data)
Three Months Ended May 31, 2007 2006
Restruct-
uring
Stock and
Normalized Options(1) Other(2) GAAP GAAP
Revenues $280,100 $ - $ - $280,100 $238,768
Operating expenses:
Cost of service 107,326 - - 107,326 89,062
Sales, general and
administrative 116,608 2,012 - 118,620 97,305
Restructuring and other - - 3,088 3,088 -
223,934 2,012 3,088 229,034 186,367
Operating income 56,166 (2,012) (3,088) 51,066 52,401
Other income/(expense):
Interest and other
income 4,654 - - 4,654 2,970
Interest and other
expense (2,166) - - (2,166) (2,127)
2,488 - - 2,488 843
Income before income taxes 58,654 (2,012) (3,088) 53,554 53,244
Provision for income taxes (19,361) 672 1,002 (17,687) (16,960)
Minority interest, net of
tax (2,689) - - (2,689) (2,222)
Net income $36,604 $(1,340) $(2,086) $33,178 $34,062
Diluted shares 82,015 - - 82,015 82,912
Diluted earnings per
share $0.45 $(0.02) $(0.03) $0.40 $0.41
(1) Relates to the company's adoption of SFAS 123 ( R ) on June 1, 2006,
which requires the recognition of compensation expense resulting from
employee stock options. Also reflects the related income tax benefit
using the company's effective tax rate, which is defined as the
provision for income taxes divided by income before income taxes and
minority interest.
(2) Restructuring and other charges consist of employee termination
benefits, facility closure costs, and fixed asset abandonment relating
to various restructuring initiatives. Also reflects the related
income tax benefit using the company's effective tax rate, as
described above.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
Reconciliation to Exclude Stock Option Expenses and Restructuring and
Other Charges from Normalized Results
(In thousands, except per share data)
Year Ended May 31, 2007
Restructuring
Stock and
Normalized Options(1) Other(2) GAAP
Revenues $1,061,523 $ - $ - $1,061,523
Operating expenses:
Cost of service 414,837 - - 414,837
Sales, general and
administrative 413,169 12,340 - 425,509
Restructuring and other - - 3,088 3,088
828,006 12,340 3,088 843,434
Operating income 233,517 (12,340) (3,088) 218,089
Other income/(expense):
Interest and other income 16,706 - - 16,706
Interest and other expense (8,464) - - (8,464)
8,242 - - 8,242
Income before income taxes 241,759 (12,340) (3,088) 226,331
Provision for income taxes (78,442) 4,004 1,002 (73,436)
Minority interest, net of tax (9,910) - - (9,910)
Net income $153,407 $(8,336) $(2,086) $142,985
Diluted shares 81,822 - - 81,822
Diluted earnings per share(3) $1.87 $(0.10) $(0.02) $1.75
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
Reconciliation to Exclude Stock Option Expenses and Restructuring and
Other Charges from Normalized Results
(In thousands, except per share data)
Year Ended May 31, 2006
Normalized Restructuring(2) GAAP
Revenues $908,056 $ - $908,056
Operating expenses:
Cost of service 358,020 - 358,020
Sales, general and administrative 347,070 - 347,070
Restructuring and other - 1,878 1,878
705,090 1,878 706,968
Operating income 202,966 (1,878) 201,088
Other income/(expense):
Interest and other income 7,576 - 7,576
Interest and other expense (7,144) - (7,144)
432 - 432
Income before income taxes 203,398 (1,878) 201,520
Provision for income taxes (68,151) 629 (67,522)
Minority interest, net of tax (8,474) - (8,474)
Net income $126,773 $(1,249) $125,524
Diluted shares 82,149 - 82,149
Diluted earnings per share(3) $1.54 $(0.01) $1.53
(1) Relates to the company's adoption of SFAS 123 ( R ) on June 1, 2006,
which requires the recognition of compensation expense resulting from
employee stock options. Also reflects the related income tax benefit
using the company's effective tax rate, which is defined as the
provision for income taxes divided by income before income taxes and
minority interest.
(2) Restructuring and other charges consist of employee termination
benefits, facility closure costs, and fixed asset abandonment
relating to various restructuring initiatives. Also reflects the
related income tax benefit using the company's effective tax rate, as
described above.
(3) The $0.02 impact of restructuring and other charges for fiscal year
2007 differs from the $0.03 impact shown for the fourth quarter of
fiscal 2007 due to rounding on normalized and GAAP diluted earnings
per share results.
SEGMENT INFORMATION
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands)
Three Months Ended May 31,
2007 2006
Revenues
Domestic direct $154,166 $130,618
Canada 54,256 51,597
Asia-Pacific 13,377 -
Central and Eastern Europe 12,457 10,810
Domestic indirect and other 11,695 12,213
Merchant services 245,951 205,238
Domestic 29,323 30,361
Europe 4,826 3,169
Money transfer 34,149 33,530
Total revenues $280,100 $238,768
Operating income
Merchant services $63,395 $56,640
Money transfer 3,481 6,602
Corporate(1) (12,722) (10,841)
Restructuring and other (3,088) -
Operating income $51,066 $52,401
(1) Fiscal 2007 includes compensation expense resulting from employee
stock options as a result of our adoption of SFAS 123R. Fiscal 2006
does not include these expenses.
SEGMENT INFORMATION
GLOBAL PAYMENTS INC. AND SUBSIDIARIES
(In thousands)
Year Ended May 31,
2007 2006
Revenues
Domestic direct $558,026 $481,273
Canada 224,570 208,126
Asia-Pacific 48,449 -
Central and Eastern Europe 51,224 47,114
Domestic indirect and other 46,873 51,987
Merchant services 929,142 788,500
Domestic 115,416 109,067
Europe 16,965 10,489
Money transfer 132,381 119,556
Total revenues $1,061,523 $908,056
Operating income
Merchant services $259,670 $224,221
Money transfer 14,476 18,741
Corporate(1) (52,969) (39,996)
Restructuring and other (3,088) (1,878)
Operating income $218,089 $201,088
(1) Fiscal 2007 includes compensation expense resulting from employee
stock options as a result of our adoption of SFAS 123R. Fiscal 2006
does not include these expenses.
For more information, please contact:
Jane M. Elliott
Tel: +1-770-829-8234
Fax: +1-770-829-8267
Email: investor.relations@globalpay.com
