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Global Payments Reports Second Quarter Earnings for Fiscal 2013

Increases EPS Outlook for Full-Year 2013

ATLANTA, Jan. 8, 2013 /PRNewswire/ -- Global Payments Inc. (NYSE: GPN), a leading, worldwide provider of electronic transaction processing solutions, today announced results for its fiscal second quarter ended November 30, 2012. 

(Logo:  http://photos.prnewswire.com/prnh/20010221/ATW031LOGO)

Second Quarter 2013 Summary

  • Revenue grew 11% to $588.5 million compared to $530.5 million in the second quarter of 2012.
  • Cash diluted earnings per share[1] grew 8% to $0.93 compared to $0.86 in the second quarter of 2012.
  • GAAP diluted earnings per share were $0.89, compared to $0.78 in the second quarter of 2012.

Chairman and CEO Paul R. Garcia said, "We are pleased with our solid performance in the quarter and the recent completion of the two previously announced acquisitions, Accelerated Payment Technologies in October, and the remaining 44% ownership interest in the Asia-Pacific joint venture from HSBC in December. We have also increased our full-year cash EPS expectation to a range of $3.61 to $3.68.

"Additionally, I am delighted to announce that we have essentially completed our remediation work as anticipated and the required documentation is in the process of being provided to the Qualified Security Assessor for verification. This verification allows the Networks to evaluate the results and return us to the list of PCI compliant service providers," concluded Garcia.

Share Repurchase Authorization

The Board of Directors approved an additional $150 million share repurchase authorization of Global Payments' stock which increased the current $150 million share repurchase authorization to a total of $300 million.  As of January 8, 2013, $287 million remains available.  Under this program, Global Payments may repurchase shares in the open market or as otherwise may be determined by the company, subject to market conditions, business opportunities and other factors.  Repurchased shares will be retired but will be available for future issuance.

David Mangum, Senior Executive Vice President and CFO, stated,  "We are pleased with the increase in the share repurchase authorization and we expect to execute on our buyback plans. With the recently increased financing capacity we completed in the second quarter of 2013, we have significant capital flexibility to drive organic growth, acquisitions and on-going share repurchases."

Acquisition Closings and Funding

Global Payments closed the Accelerated Payment Technologies (APT) acquisition for $413 million on October 1, 2012.  APT is an innovative provider of fully-integrated payment technology solutions for small to medium sized merchants.  The company also closed on a new five-year senior unsecured term loan facility of $700 million and increased its existing senior unsecured revolving credit facility by $150 million.  In addition, effective December 1, 2012, the company completed its previously announced acquisition of the remaining 44% ownership interest in the Asia-Pacific joint venture for $242 million. Global Payments will continue to be HSBC's preferred strategic partner for card acquiring services in Asia-Pacific, covering 11 markets.

2013 Outlook

For the full-year of fiscal 2013, the company continues to expect annual revenue of $2,360 million to $2,400 million, or 7% to 9% growth over fiscal 2012. 

Annual expectations for fiscal 2013 diluted earnings per share on a cash basis are now increased to a range of $3.61 to $3.68, or growth of 2% to 4% over fiscal 2012.  On a constant currency basis, the company continues to expect revenue to grow 8% to 10% and diluted earnings per share on a cash basis to grow 5% to 7%. 

Annual fiscal 2013 GAAP diluted earnings per share, excluding the impact of all intrusion remediation costs, are expected to be in a range of $3.01 to $3.08.

Both cash and GAAP diluted earnings per share expectations exclude the impact of any potential future share repurchases.

For reconciliation of Cash Earnings to GAAP and constant currency, see schedule 9.

Conference Call

Global Payments will hold a conference call today, January 8, 2013 at 5:00 p.m. EST to discuss financial results and business highlights.  Callers may access the conference call via the investor relations page of the company's website at www.globalpaymentsinc.com by clicking the "Webcast" button; or callers in North America may dial 1-888-895-3550 and callers outside North America may dial 1-706-758-8809.  The pass code is "GPN."  A replay of the call may be accessed through the Global Payments website through January 21, 2013.   

About Global Payments

Global Payments Inc. (NYSE:GPN) is a leading provider of electronic transaction processing services for merchants, Independent Sales Organizations (ISOs), financial institutions, government agencies and multi-national corporations located throughout the United States, Canada, Europe and the Asia-Pacific region.  Global Payments, a Fortune 1000 company, 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.  Visit www.globalpaymentsinc.com for more information about the company and its services.

This announcement and comments made by Global Payments' management during the conference call may 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.  Important factors that may cause actual events or results to differ materially from those anticipated by such forward-looking statements include the following: the effect on our results of operations of the remediation efforts resulting from the unauthorized access to our processing system announced in March 2012; foreign currency risks which become increasingly relevant as we expand internationally; the effect of current domestic and worldwide economic conditions, including sovereign insolvency situations and a decline in the value of the U.S. dollar, and future performance and integration of acquisitions including APT, and other risks detailed in the company's SEC filings, including the most recently filed Form 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.

[1] See Schedule 2 for Cash Earnings and Schedules 6 and 7 for Reconciliations of Cash Earnings to GAAP.




Investor contact:  [email protected]

Media contact:  [email protected]

Jane Elliott                 

Kay Sharpton                                     

Amy Corn

770-829-8234             

770-829-8870                                     

770-829-8755




 

SCHEDULE 1













GAAP CONSOLIDATED STATEMENTS OF INCOME 









GLOBAL PAYMENTS INC. AND SUBSIDIARIES

























(In thousands, except per share data)




























Three Months Ended November 30,




Six Months Ended November 30,







2012


2011


% Change


2012


2011


% Change





(unaudited)
























Revenues




$        588,538


$         530,505


11%


$      1,178,825


$    1,073,276


10%
















Operating expenses:













     Cost of service



210,268


185,931


13%


414,659


377,467


10%

     Sales, general and administrative


276,177


247,994


11%


557,596


490,619


14%

     Processing system intrusion


(14,489)


-


NM


9,500


-


NM





471,956


433,925


9%


981,755


868,086


13%
















Operating income



116,582


96,580


21%


197,070


205,190


(4%)
















Other income (expense):













     Interest and other income


2,187


2,259


(3%)


4,170


4,760


(12%)

     Interest and other expense


(14,609)


(4,878)


199%


(18,154)


(8,965)


102%





(12,422)


(2,619)


374%


(13,984)


(4,205)


233%
















Income before income taxes 


104,160


93,961


11%


183,086


200,985


(9%)

Provision for income taxes


(28,789)


(25,812)


12%


(53,553)


(60,755)


(12%)

Net income



75,371


68,149


11%


129,533


140,230


(8%)

Less: Net income attributable to noncontrolling interests, net of tax


(5,188)


(6,968)


(26%)


(12,675)


(15,075)


(16%)

          Net income attributable to Global Payments


$          70,183


$           61,181


15%


$         116,858


$       125,155


(7%)
















Earnings per share attributable to Global Payments:













          Basic



$              0.89


$               0.78


14%


$               1.49


$             1.58


(6%)

          Diluted



$              0.89


$               0.78


14%


$               1.48


$             1.57


(6%)
















Weighted average shares outstanding:













          Basic



78,751


78,348




78,669


79,207



          Diluted



79,144


78,876




79,062


79,831

































NM - Not Meaningful




























 

SCHEDULE 2













CASH EARNINGS ATTRIBUTABLE TO GLOBAL PAYMENTS








GLOBAL PAYMENTS INC. AND SUBSIDIARIES
























(In thousands, except per share data)





























Three Months Ended November 30,




Six Months Ended November 30,







2012


2011


% Change


2012


2011


% Change
















Revenues




$         588,538


$       530,505


11%


$      1,178,825


$    1,073,276


10%
















Operating expenses:













     Cost of service



195,932


173,778


13%


388,937


352,671


10%

     Sales, general and administrative


276,177


247,994


11%


556,796


490,619


13%





472,109


421,772


12%


945,733


843,290


12%
















Operating income



116,429


108,733


7%


233,092


229,986


1%
















Other income (expense):













     Interest and other income


2,187


2,259


(3%)


4,170


4,760


(12%)

     Interest and other expense


(6,226)


(4,878)


28%


(9,771)


(8,965)


9%





(4,039)


(2,619)


54%


(5,601)


(4,205)


33%
















Income before income taxes 


112,390


106,114


6%


227,491


225,781


1%

Provision for income taxes


(29,385)


(29,569)


(1%)


(65,938)


(68,251)


(3%)

Net income  



83,005


76,545


8%


161,553


157,530


3%

Less: Net income attributable to noncontrolling interests, net of tax


(9,419)


(8,913)


6%


(19,171)


(19,085)


0%

Net income attributable to Global Payments


$           73,586


$         67,632


9%


$         142,382


$       138,445


3%































Basic earnings per share


$               0.93


$             0.86


8%


$               1.81


$             1.75


3%
















Diluted earnings per share


$               0.93


$             0.86


8%


$               1.80


$             1.73


4%
















Weighted average shares outstanding:













          Basic



78,751


78,348




78,669


79,207



          Diluted



79,144


78,876




79,062


79,831

































NM - Not Meaningful




























See Schedules 6 and 7 for a reconciliation of cash earnings to GAAP.






















 

SCHEDULE 3














SEGMENT INFORMATION 













GLOBAL PAYMENTS INC. AND SUBSIDIARIES






























(In thousands)









































 Three Months Ended November 30, 













2012


2011


 % Change 









 GAAP 


 Cash

Earnings 


 GAAP 


 Cash

Earnings 


 GAAP 


 Cash

Earnings





















Revenues:















United States



$    339,998


$    339,998


$    293,416


$    293,416


16%


16%


Canada



80,770


80,770


85,521


85,521


(6%)


(6%)



North America merchant services


420,768


420,768


378,937


378,937


11%


11%





















Europe



131,161


131,161


115,169


115,169


14%


14%


Asia-Pacific



36,609


36,609


36,399


36,399


1%


1%



International merchant services


167,770


167,770


151,568


151,568


11%


11%























Total revenues


$    588,538


$    588,538


$    530,505


$    530,505


11%


11%





















Operating income:















North America merchant services


$      67,114


$      73,280


$      70,673


$      73,495


(5%)


(0%)


International merchant services


53,987


62,157


44,494


53,825


21%


15%


Corporate1



(4,519)


(19,008)


(18,587)


(18,587)


76%


(2%)




Operating income


$    116,582


$    116,429


$      96,580


$    108,733


21%


7%















































 Six Months Ended November 30, 













2012


2011


 % Change 









 GAAP 


 Cash Earnings 


 GAAP 


 Cash Earnings 


 GAAP 


 Cash Earnings 





















Revenues:















United States



$    685,896


$    685,896


$    580,841


$    580,841


18%


18%


Canada



161,667


161,667


176,742


176,742


(9%)


(9%)



North America merchant services


847,563


847,563


757,583


757,583


12%


12%





















Europe



259,626


259,626


244,583


244,583


6%


6%


Asia-Pacific



71,636


71,636


71,110


71,110


1%


1%



International merchant services


331,262


331,262


315,693


315,693


5%


5%























Total revenues


$ 1,178,825


$ 1,178,825


$ 1,073,276


$ 1,073,276


10%


10%





















Operating income:















North America merchant services


$    134,331


$    144,723


$    142,431


$    148,111


(6%)


(2%)


International merchant services


111,127


127,201


100,152


119,268


11%


7%


Corporate1



(48,388)


(38,832)


(37,393)


(37,393)


(29%)


(4%)




Operating income


$    197,070


$    233,092


$    205,190


$    229,986


(4%)


1%




















1Fiscal 2013 GAAP amounts include a processing intrusion credit of $14.5 million for the three months ended November 30, 2012 and processing system intrusion costs of $9.5 million for the six months ended November 30, 2012.




















See Schedule 8 for reconciliation of cash earnings segment information to GAAP. 




















 

SCHEDULE 4






CONSOLIDATED BALANCE SHEETS





GLOBAL PAYMENTS INC. AND SUBSIDIARIES













(In thousands)



















November 30,


May 31,






2012


2012






(unaudited)




ASSETS







Current assets:







Cash and cash equivalents


$         998,261


$       781,275


Accounts receivable, net of allowances for doubtful accounts of $833 and $532, respectively

183,256


182,962


Claims receivable, net of allowance for losses of $3,786 and $3,435, respectively

968


1,029


Settlement processing assets


237,640


217,994


Inventory



14,147


9,864


Deferred income taxes


6,464


21,969


Prepaid expenses and other current assets

49,184


33,646


Total current assets


1,489,920


1,248,739










Goodwill



1,059,520


724,687


Other intangible assets, net of accumulated amortization of $267,956 and $235,296, respectively

416,170


290,188


Property and equipment, net of accumulated depreciation of $179,846 and $161,911, respectively

338,195


305,848


Deferred income taxes


97,966


97,235


Other




26,950


21,446










Total assets


$      3,428,721


$    2,688,143










LIABILITIES AND EQUITY





Current liabilities:







Lines of credit



$         212,399


$       215,391


Current portion of long-term debt

102,425


76,420


Commitment to purchase redeemable noncontrolling interest

242,000


-


Accounts payable and accrued liabilities

244,499


316,313


Settlement processing obligations

228,711


216,878


Income taxes payable


7,436


12,283


  Total current liabilities


1,037,470


837,285










Long-term debt



777,988


236,565


Deferred income taxes


167,365


106,644


Other long-term liabilities


71,097


62,306


Total liabilities


2,053,920


1,242,800










Commitments and contingencies













Redeemable noncontrolling interest

-


144,422










Equity:








Preferred stock, no par value; 5,000,000 shares authorized and none issued

-


-


Common stock, no par value; 200,000,000 shares authorized; 78,724,622 and





78,551,297 issued and outstanding at November 30, 2012 and May 31, 2012, respectively.

-


-


Paid-in capital



257,554


358,728


Retained earnings


957,978


843,456


Accumulated other comprehensive income (loss) 

18,432


(30,000)


      Total Global Payments shareholders' equity

1,233,964


1,172,184


Noncontrolling interest


140,837


128,737


Total equity



1,374,801


1,300,921










Total liabilities and equity

$      3,428,721


$    2,688,143










 

SCHEDULE 5




UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS




GLOBAL PAYMENTS INC. AND SUBSIDIARIES











(In thousands)
















Six Months Ended November 30,





2012


2011








Cash flows from operating activities:





Net income

$   129,533


$    140,230


Adjustments to reconcile net income to net cash used in operating activities:





Depreciation and amortization of property and equipment

26,494


23,444


Amortization of acquired intangibles

25,561


24,796


Share-based compensation expense

9,178


8,425


Provision for operating losses and bad debts

11,970


13,061


Deferred income taxes

30,055


5,915


Other, net

(2,231)


(100)


Changes in operating assets and liabilities, net of the effects of acquisitions:  





Accounts receivable

721


3,897


Claims receivable

(6,600)


(7,880)


Settlement processing assets and obligations, net

(11,671)


(499,849)


Inventory

(4,297)


(4,212)


Prepaid expenses and other assets

(11,204)


62


Accounts payable and other accrued liabilities

(67,869)


(31,257)


Income taxes payable

(4,847)


9,402


Net cash provided by (used in) operating activities

124,793


(314,066)








Cash flows from investing activities:





Business, intangible and other asset acquisitions, net of cash acquired

(409,731)


(7,000)


Capital expenditures

(54,393)


(35,146)


Net decrease in financing receivables

1,485


1,203


Net cash used in investing activities

(462,639)


(40,943)








Cash flows from financing activities:





Net payments on short-term lines of credit

(2,992)


(45,069)


Proceeds from issuance of long-term debt

910,327


71,374


Principal payments under long-term debt

(343,133)


(131,345)


Payment of debt issuance costs

(3,987)


-


Proceeds from stock issued under employee stock plans

7,080


(768)


Common stock repurchased - share-based compensation plans

(10,224)


-


Repurchase of common stock

(12,653)


(99,604)


Tax benefit from employee share-based compensation 

1,791


1,436


Distribution to noncontrolling interests

(5,740)


(4,660)


Dividends paid

(3,153)


(3,169)


Net cash provided by (used in) financing activities

537,316


(211,805)








Effect of exchange rate changes on cash

17,516


(16,611)








Increase (decrease) in cash and cash equivalents

216,986


(583,425)

Cash and cash equivalents, beginning of period

781,275


1,354,285

Cash and cash equivalents, end of period

$   998,261


$    770,860








 

SCHEDULE 6







RECONCILIATION OF QUARTERLY CASH EARNINGS ATTRIBUTABLE TO GLOBAL PAYMENTS TO GAAP

GLOBAL PAYMENTS INC. AND SUBSIDIARIES












(In thousands, except per share data)














Three Months Ended November 30, 2012



GAAP

Processing

System

Intrusion

Other2

Cash

Earnings

Adjustments1

Cash Earnings








Revenues


$           588,538

$                -

$                  -

$                   -

$          588,538








Operating expenses:







   Cost of service


210,268

-

-

(14,336)

195,932

   Sales, general and administrative


276,177

-

-

-

276,177

   Processing system intrusion


(14,489)

14,489

-

-

-



471,956

14,489

-

(14,336)

472,109








Operating income


116,582

(14,489)

-

14,336

116,429








Other income (expense):







   Interest and other income


2,187

-

-

-

2,187

   Interest and other expense


(14,609)

-

8,383

-

(6,226)



(12,422)

-

8,383

-

(4,039)








Income before income taxes 


104,160

(14,489)

8,383

14,336

112,390

Provision for income taxes


(28,789)

5,000

(1,383)

(4,213)

(29,385)

Net income  


75,371

(9,489)

7,000

10,123

83,005

Less: Net income attributable to noncontrolling interests, net of tax


(5,188)

-

(2,853)

(1,378)

(9,419)

Net income attributable to Global Payments


$             70,183

$         (9,489)

$             4,147

$             8,745

$            73,586








Diluted shares


79,144




79,144

Diluted earnings per share


$                 0.89

$           (0.12)

$               0.05

$               0.11

$                0.93

















Three Months Ended November 30, 2011



GAAP



Cash Earnings

Adjustments1

Cash Earnings








Revenues


$           530,505



$                   -

$          530,505








Operating expenses:







   Cost of service


185,931



(12,153)

173,778

   Sales, general and administrative


247,994



-

247,994



433,925



(12,153)

421,772








Operating income


96,580



12,153

108,733








Other income (expense):







   Interest and other income


2,259



-

2,259

   Interest and other expense


(4,878)



-

(4,878)



(2,619)



-

(2,619)








Income before income taxes 


93,961



12,153

106,114

Provision for income taxes


(25,812)



(3,757)

(29,569)

Net income  


68,149



8,396

76,545

Less: Net income attributable to noncontrolling interests, net of tax


(6,968)



(1,945)

(8,913)

Net income attributable to Global Payments


$             61,181



$             6,451

$            67,632








Diluted shares


78,876




78,876

Diluted earnings per share


$                 0.78



$               0.08

$                0.86















1Represents adjustments to cost of service to exclude acquisition intangible amortization expense and the related income tax benefit.








2Represents HSBC's share of GPAP dividends declared.















We supplemented our reporting of net income and the related earnings per share information determined in accordance with GAAP by reporting net income and the related earnings per share for the three months ended November 30, 2012 and 2011 on a "cash earnings" basis in this earnings release as a measure to help evaluate performance. We calculated November 30,2012 net income and earnings per share on a cash basis by excluding credits related to the processing system intrusion and acquisition intangible amortization. We also adjusted the net income attributable to noncontrolling interests to include HSBC's share of second quarter 2013 GPAP net income. We calculated November 30, 2011 net income and earnings per share on a cash basis by excluding acquisition intangible amortization from our results. We exclude these items in order to more clearly focus on the factors we believe are pertinent to the daily management of our operations. Our net income and earnings per share reported on a cash earnings basis should be considered in addition to, and not as a substitute for, net income and earnings per share determined in accordance with GAAP. Our measures of net income and earnings per share on a cash earnings basis reflect management's judgment of particular items, and may not be comparable to similarly titled measures reported by other companies.

 

SCHEDULE 7







RECONCILIATION OF YEAR TO DATE CASH EARNINGS ATTRIBUTABLE TO GLOBAL PAYMENTS TO GAAP

GLOBAL PAYMENTS INC. AND SUBSIDIARIES











(In thousands, except per share data)














Six Months Ended November 30, 2012



GAAP

Processing

System

Intrusion

Other2

Cash Earnings

Adjustments1

Cash Earnings








Revenues


$        1,178,825

$                  -

$                  -

$                   -

$       1,178,825








Operating expenses:







   Cost of service


414,659

-

(161)

(25,561)

388,937

   Sales, general and administrative


557,596

-

(800)

-

556,796

   Processing system intrusion


9,500

(9,500)

-

-

-



981,755

(9,500)

(961)

(25,561)

945,733








Operating income


197,070

9,500

961

25,561

233,092








Other income (expense):







   Interest and other income


4,170

-

-

-

4,170

   Interest and other expense


(18,154)

-

8,383

-

(9,771)



(13,984)

-

8,383

-

(5,601)








Income before income taxes 


183,086

9,500

9,344

25,561

227,491

Provision for income taxes


(53,553)

(3,279)

(1,533)

(7,573)

(65,938)

Net income  


129,533

6,221

7,811

17,988

161,553

Less: Net income attributable to noncontrolling interests, net of tax


(12,675)

-

(3,594)

(2,902)

(19,171)

Net income attributable to Global Payments


$           116,858

$            6,221

$             4,217

$           15,086

$          142,382








Diluted shares


79,062




79,062

Diluted earnings per share


$                 1.48

$              0.08

$               0.05

$               0.19

$                1.80

















Six Months Ended November 30, 2011



GAAP



Cash Earnings Adjustments1

Cash Earnings








Revenues


$        1,073,276



$                   -

$       1,073,276








Operating expenses:







   Cost of service


377,467



(24,796)

352,671

   Sales, general and administrative


490,619



-

490,619



868,086



(24,796)

843,290








Operating income


205,190



24,796

229,986








Other income (expense):







   Interest and other income


4,760



-

4,760

   Interest and other expense


(8,965)



-

(8,965)



(4,205)



-

(4,205)








Income before income taxes 


200,985



24,796

225,781

Provision for income taxes


(60,755)



(7,496)

(68,251)

Net income  


140,230



17,300

157,530

Less: Net income attributable to noncontrolling interests, net of tax


(15,075)



(4,010)

(19,085)

Net income attributable to Global Payments


$           125,155



$           13,290

$          138,445








Diluted shares


79,831




79,831

Diluted earnings per share


$                 1.57

$                  -

$                  -

$               0.18

$                1.73















1Represents adjustments to cost of service to exclude acquisition intangible amortization expense and the related income tax benefit.








2Represents HSBC's share of GPAP dividends declared and one-time charges primarily related to employee termination benefits.















We supplemented our reporting of net income and the related earnings per share information determined in accordance with GAAP by reporting net income and the related earnings per share for the six months ended November 30, 2012 and 2011 on a "cash earnings" basis in this earnings release as a measure to help evaluate performance. We calculated November 30,2012 net income and earnings per share on a cash basis by excluding costs related to the processing system intrusion, acquisition intangible amortization and one-time charges related to employee termination benefits. We also adjusted the net income attributable to noncontrolling interests to include HSBC's share of August 2012 through November 2012 GPAP net income. We calculated November 30, 2011 net income and earnings per share on a cash basis by excluding acquisition intangible amortization from our results. We exclude these charges in order to more clearly focus on the factors we believe are pertinent to the daily management of our operations. Our net income and earnings per share reported on a cash earnings basis should be considered in addition to, and not as a substitute for, net income and earnings per share determined in accordance with GAAP. Our measures of net income and earnings per share on a cash earnings basis reflect management's judgment of particular items, and may not be comparable to similarly titled measures reported by other companies.








 

SCHEDULE 8













RECONCILIATION OF CASH EARNINGS SEGMENT INFORMATION TO GAAP







GLOBAL PAYMENTS INC. AND SUBSIDIARIES



























(In thousands)







































 Three Months Ended November 30, 









2012


2011









 GAAP 

Processing

System

Intrusion

Other

Cash

Earnings

Adjustments1

 Cash Earnings 


 GAAP 


Cash

Earnings

Adjustments1

 Cash Earnings 




















Revenues:














United States



$      339,998

$                -

$                -

$                       -

$      339,998


$      293,416


$                       -

$      293,416


Canada



80,770

-

-

-

80,770


85,521


-

85,521



North America merchant services


420,768

-

-

-

420,768


378,937


-

378,937




















Europe



131,161

-

-

-

131,161


115,169


-

115,169


Asia-Pacific



36,609

-

-

-

36,609


36,399


-

36,399



International merchant services


167,770

-

-

-

167,770


151,568


-

151,568






















Total revenues


$      588,538

$                -

$                -

$                       -

$      588,538


$      530,505


$                       -

$      530,505




















Operating income:














North America merchant services


$        67,114

$                -


$                 6,166

$        73,280


$        70,673


$                 2,822

$        73,495


International merchant services


53,987

-


8,170

62,157


44,494


9,331

53,825


Corporate



(4,519)

(14,489)


-

(19,008)


(18,587)


-

(18,587)



Operating income


$      116,582

$       (14,489)

$                -

$               14,336

$      116,429


$        96,580


$               12,153

$      108,733













































 Six Months Ended November 30, 









2012


2011









 GAAP 

Processing System Intrusion

Other2

Cash Earnings Adjustments1

 Cash Earnings 


 GAAP 


Cash Earnings Adjustments1

 Cash Earnings 




















Revenues:














United States



$      685,896

$                -

$                -

$                       -

$      685,896


$      580,841


$                       -

$      580,841


Canada



161,667

-

-

-

161,667


176,742


-

176,742



North America merchant services


847,563

-

-

-

847,563


757,583


-

757,583




















Europe



259,626

-

-

-

259,626


244,583


-

244,583


Asia-Pacific



71,636

-

-

-

71,636


71,110


-

71,110



International merchant services


331,262

-

-

-

331,262


315,693


-

315,693






















Total revenues


$   1,178,825

$                -

$                -

$                       -

$   1,178,825


$   1,073,276


$                       -

$   1,073,276




















Operating income:














North America merchant services


$      134,331

$                -

$             905

$                 9,487

$      144,723


$      142,431


$                 5,680

$      148,111


International merchant services


111,127

-

-

16,074

127,201


100,152


19,116

119,268


Corporate



(48,388)

9,500

56

-

(38,832)


(37,393)


-

(37,393)



Operating income


$      197,070

$          9,500

$             961

$               25,561

$      233,092


$      205,190


$               24,796

$      229,986





































1 Represents acquisition intangible amortization expense.
























2 Represents one-time charges primarily related to employee termination benefits.



















 


SCHEDULE 9









OUTLOOK SUMMARY








GLOBAL PAYMENTS INC. AND SUBSIDIARIES




















(In millions, except per share data)





























Fiscal 2012

Actual



Fiscal 2013

Outlook


% Change

FY12
















Revenue Outlook










Constant currency1



$       2,204



$2,385 to $2,425


8% to 10%


Foreign currency impact2


 NA  



($25)




Total Revenues



$       2,204



$2,360 to $2,400


7% to 9%
















EPS Outlook










Constant currency1



$         3.53



 $3.69 to $3.76 


5% to 7%


Foreign currency impact2


 NA  



($0.08)




Cash EPS 



$         3.53



 $3.61 to $3.68 


2% to 4%


Acquisition-related intangibles and non-recurring items 3


(0.48)



($0.60)


25%


Processing system intrusion


(0.68)



TBD*


NM


GAAP Diluted EPS 



$         2.37



 $3.01 to $3.08 


27% to 30%















 

We supplement our fiscal 2013 outlook of total revenues and earnings per share information determined in accordance with GAAP by reporting revenues and earnings per share on a "constant currency" basis in this earnings release as a measure to help evaluate performance.  We calculated revenues and earnings per share on a constant currency basis by converting our fiscal 2013 expected revenues and expenses at fiscal 2012 exchange rates.  We exclude the impact of exchange rate fluctuations in order to more clearly focus on the factors we believe are pertinent to the daily management of our operations, and our management uses constant currency measures to evaluate the impact of operational business decisions.  Our revenues and earnings per share reported on a constant currency basis should be considered in addition to, and not as a substitute for, revenues and earnings per share determined in accordance with GAAP. Our measures of revenues and earnings per share on a constant currency basis reflect management's judgment of particular items, and may not be comparable to similarly titled measures reported by other companies.

 

1 Reflects current period and forecasted results on a pro forma basis as if foreign currency rates did not change from the comparable prior year period.

 

2 Reflects the impact of actual and forecasted changes in foreign currency rates from the comparable prior year period. 

 

Fiscal 2013 reflects $0.56 of acquisition-related intangibles and $0.04 of non-recurring items.  Acquisition-related intangibles accounted for $0.35 in fiscal 2012 and non-recurring items $0.13. 

 

* Not able to accurately estimate 2013 charges for processing system intrusion, remediation, true-ups, etc. We currently anticipate that such additional costs may be $25 to $35 million in fiscal 2013 which reflects a $31.5 million reduction of the company's original estimate of fraud losses, fines and other charges resulting in total processing system intrusion costs for six months ended November 30, 2012 of $9.5 million.  Insurance proceeds of up to $28 million may possibly occur in fiscal 2014 rather than 2013.

 

 

NA=Not Applicable

NM=Not Meaningful


 

SOURCE Global Payments Inc.

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