ATLANTA, July 21, 2011 /PRNewswire/ -- Global Payments Inc. (NYSE: GPN) today announced results for its fiscal fourth quarter and year ended May 31, 2011. For the full year, revenues grew 13% to $1,859.8 million compared to $1,642.5 million in the prior fiscal year. Normalized diluted earnings per share from continuing operations grew 9% to $2.77 compared to $2.54 in the prior year (See Schedule 2 for Normalized Earnings). On a GAAP basis, the company reported fiscal 2011 full year diluted earnings per share from continuing operations of $2.61 compared to $2.52 in the prior year (See Schedule 1 for GAAP Consolidated Statements of Income).
(Logo: http://photos.prnewswire.com/prnh/20010221/ATW031LOGO )
For the fourth quarter, revenues grew 22% to $519.8 million compared to $425.1 million in the prior year. Normalized diluted earnings per share from continuing operations grew 31% to $0.76 compared to $0.58 in the prior year quarter. On a GAAP basis, the company reported fourth quarter diluted earnings per share from continuing operations of $0.72 compared to $0.56 in the prior year quarter.
Normalized fourth quarter and full year results exclude expenses related to certain start-up and duplicative costs for the company's Global Service Center in Manila, Philippines. These results also exclude certain employee termination and relocation benefits. (See Schedules 7 and 8 for Reconciliations of Normalized and Cash Earnings to GAAP).
Chairman and CEO Paul R. Garcia stated, "We are pleased with our strong fiscal year 2011 financial performance which was driven by solid execution of our business strategy across our regions and the December 2010 addition of Spain. We delivered exceptional results in the fourth quarter, driven by strong performance in North America and outstanding results in our International segment. Our execution during fiscal 2011 established a basis from which we expect to drive margin expansion of as much as 30 basis points in fiscal 2012."
David E. Mangum, Senior Executive Vice President and CFO, stated, "On a cash basis, the company reported fiscal 2011 fourth quarter and full year diluted earnings per share from continuing operations of $0.86 and $3.08, respectively, which represents 32% and 10% growth over the respective prior year periods.
For the full year of fiscal 2012, the company expects annual revenue of $2,100 million to $2,150 million, or 13% to 16% growth over fiscal 2011. The company expects annual fiscal 2012 diluted earnings per share on a cash basis of $3.35 to $3.43, reflecting 9% to 11% growth over fiscal 2011. Annual fiscal 2012 GAAP diluted earnings per share is expected to be $3.02 to $3.09," said Mangum.
Cash earnings exclude normalized adjustments and acquisition intangible amortization expense from continuing operations. (See Schedule 3 for Cash Earnings and Schedule 4 for Segment Information).
Conference Call
Global Payments will hold a conference call today, July 21, 2011 at 5:00 p.m. ET to discuss financial results and business highlights. Callers may access the conference call via the company's Web site 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 Web site through August 5, 2011.
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: foreign currency risks which become increasingly relevant as we expand internationally, the effect of current worldwide economic conditions, including sovereign insolvency situations and a decline in the value of the U.S. dollar, and future performance and integration of recent 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.
SCHEDULE 1 |
|||||||||||||
UNAUDITED GAAP CONSOLIDATED STATEMENTS OF INCOME |
|||||||||||||
GLOBAL PAYMENTS INC. AND SUBSIDIARIES |
|||||||||||||
(In thousands, except per share data) |
|||||||||||||
Three Months Ended May 31, |
Year Ended May 31, |
||||||||||||
2011 |
2010 |
% Change |
2011 |
2010 |
% Change |
||||||||
Revenues |
$ 519,754 |
$ 425,050 |
22% |
$ 1,859,802 |
$ 1,642,468 |
13% |
|||||||
Operating expenses: |
|||||||||||||
Cost of service |
191,440 |
152,322 |
26% |
665,017 |
584,609 |
14% |
|||||||
Sales, general and administrative |
240,171 |
201,243 |
19% |
863,191 |
734,580 |
18% |
|||||||
431,611 |
353,565 |
22% |
1,528,208 |
1,319,189 |
16% |
||||||||
Operating income |
88,143 |
71,485 |
23% |
331,594 |
323,279 |
3% |
|||||||
Other income (expense): |
|||||||||||||
Interest and other income |
3,534 |
1,930 |
83% |
10,774 |
4,629 |
133% |
|||||||
Interest and other expense |
(4,706) |
(4,814) |
(2%) |
(18,161) |
(17,519) |
4% |
|||||||
(1,172) |
(2,884) |
(59%) |
(7,387) |
(12,890) |
(43%) |
||||||||
Income from continuing operations before income taxes |
86,971 |
68,601 |
27% |
324,207 |
310,389 |
4% |
|||||||
Provision for income taxes |
(24,587) |
(17,890) |
37% |
(95,076) |
(87,379) |
9% |
|||||||
Income from continuing operations |
62,384 |
50,711 |
23% |
229,131 |
223,010 |
3% |
|||||||
Loss from discontinued operations, net of tax |
(29) |
(11,679) |
NM |
(975) |
(3,901) |
(75%) |
|||||||
Net income including noncontrolling interests |
62,355 |
39,032 |
60% |
228,156 |
219,109 |
4% |
|||||||
Less: Net income attributable to noncontrolling interests, net of tax |
(3,779) |
(4,842) |
(22%) |
(18,918) |
(15,792) |
20% |
|||||||
Net income attributable to Global Payments |
$ 58,576 |
$ 34,190 |
71% |
$ 209,238 |
$ 203,317 |
3% |
|||||||
Amounts attributable to Global Payments: |
|||||||||||||
Income from continuing operations |
$ 58,605 |
$ 45,869 |
28% |
$ 210,213 |
$ 207,218 |
1% |
|||||||
Loss from discontinued operations, net of tax |
(29) |
(11,679) |
NM |
(975) |
(3,901) |
(75%) |
|||||||
Net income attributable to Global Payments |
$ 58,576 |
$ 34,190 |
71% |
$ 209,238 |
$ 203,317 |
3% |
|||||||
Basic earnings per share attributable to Global Payments: |
|||||||||||||
Income from continuing operations |
$ 0.73 |
$ 0.56 |
30% |
$ 2.63 |
$ 2.56 |
3% |
|||||||
Loss from discontinued operations, net of tax |
- |
(0.14) |
NM |
(0.01) |
(0.05) |
(80%) |
|||||||
Net income attributable to Global Payments |
$ 0.73 |
$ 0.42 |
74% |
$ 2.62 |
$ 2.51 |
4% |
|||||||
Diluted earnings per share attributable to Global Payments: |
|||||||||||||
Income from continuing operations |
$ 0.72 |
$ 0.56 |
29% |
$ 2.61 |
$ 2.52 |
4% |
|||||||
Loss from discontinued operations, net of tax |
- |
(0.14) |
NM |
(0.01) |
(0.04) |
(75%) |
|||||||
Net income attributable to Global Payments |
$ 0.72 |
$ 0.42 |
71% |
$ 2.60 |
$ 2.48 |
5% |
|||||||
Weighted average shares outstanding: |
|||||||||||||
Basic |
80,222 |
81,203 |
79,837 |
81,075 |
|||||||||
Diluted |
81,045 |
82,142 |
80,478 |
82,120 |
|||||||||
NM - Not Meaningful |
|||||||||||||
SCHEDULE 2 |
|||||||||||||
NORMALIZED EARNINGS FROM CONTINUING OPERATIONS ATTRIBUTABLE TO GLOBAL PAYMENTS |
|||||||||||||
GLOBAL PAYMENTS INC. AND SUBSIDIARIES |
|||||||||||||
(In thousands, except per share data) |
|||||||||||||
Three Months Ended May 31, |
Year Ended May 31, |
||||||||||||
2011 |
2010 |
% Change |
2011 |
2010 |
% Change |
||||||||
Revenues |
$ 519,754 |
$ 425,050 |
22% |
$ 1,859,802 |
$ 1,642,468 |
13% |
|||||||
Operating expenses: |
|||||||||||||
Cost of service |
190,103 |
152,322 |
25% |
661,619 |
584,609 |
13% |
|||||||
Sales, general and administrative |
237,087 |
198,660 |
19% |
851,428 |
731,997 |
16% |
|||||||
427,190 |
350,982 |
22% |
1,513,047 |
1,316,606 |
15% |
||||||||
Operating income |
92,564 |
74,068 |
25% |
346,755 |
325,862 |
6% |
|||||||
Other income (expense): |
|||||||||||||
Interest and other income |
3,534 |
1,930 |
83% |
10,774 |
4,629 |
133% |
|||||||
Interest and other expense |
(4,706) |
(4,814) |
(2%) |
(18,161) |
(17,519) |
4% |
|||||||
(1,172) |
(2,884) |
(59%) |
(7,387) |
(12,890) |
(43%) |
||||||||
Income from continuing operations before income taxes |
91,392 |
71,184 |
28% |
339,368 |
312,972 |
8% |
|||||||
Provision for income taxes |
(26,062) |
(18,836) |
38% |
(97,546) |
(88,325) |
10% |
|||||||
Income from continuing operations including noncontrolling interests |
65,330 |
52,348 |
25% |
241,822 |
224,647 |
8% |
|||||||
Less: Net income attributable to noncontrolling interests, net of tax |
(3,779) |
(4,842) |
(22%) |
(18,918) |
(15,792) |
20% |
|||||||
Net income from continuing operations attributable to Global Payments |
$ 61,551 |
$ 47,506 |
30% |
$ 222,904 |
$ 208,855 |
7% |
|||||||
Basic earnings per share |
$ 0.77 |
$ 0.59 |
31% |
$ 2.79 |
$ 2.58 |
8% |
|||||||
Diluted earnings per share |
$ 0.76 |
$ 0.58 |
31% |
$ 2.77 |
$ 2.54 |
9% |
|||||||
Weighted average shares outstanding: |
|||||||||||||
Basic |
80,222 |
81,203 |
79,837 |
81,075 |
|||||||||
Diluted |
81,045 |
82,142 |
80,478 |
82,120 |
|||||||||
Normalized results exclude expenses consisting of $2.6 million and $7.4 million during the three and twelve months ended May 31, 2011, respectively, of start-up costs related to our new Global Service Center in Manila, Philippines and expenses of $1.8 million and $7.8 million during the three and twelve months ended May 31, 2011, respectively, related to employee termination and relocation benefits. During the three and twelve months ended May 31, 2010, normalized results exclude amounts due to our former President and Chief Operating Officer pursuant to his termination agreement dated April 21, 2010. Results for the twelve months ended May 31, 2011 also exclude a $2.5 million one-time, non-cash write-down of a deferred tax asset we established in July 2009 when we purchased the remaining 49% of our UK business. The write-down resulted from a legislated reduction to the tax rate of 1%. See Schedules 7 and 8 for reconciliations of normalized earnings from continuing operations to GAAP. |
|||||||||||||
SCHEDULE 3 |
|||||||||||||
CASH EARNINGS FROM CONTINUING OPERATIONS ATTRIBUTABLE TO GLOBAL PAYMENTS |
|||||||||||||
GLOBAL PAYMENTS INC. AND SUBSIDIARIES |
|||||||||||||
(In thousands, except per share data) |
|||||||||||||
Three Months Ended May 31, |
Year Ended May 31, |
||||||||||||
2011 |
2010 |
% Change |
2011 |
2010 |
% Change |
||||||||
Revenues |
$ 519,754 |
$ 425,050 |
22% |
$ 1,859,802 |
$ 1,642,468 |
13% |
|||||||
Operating expenses: |
|||||||||||||
Cost of service |
175,897 |
144,146 |
22% |
619,927 |
551,845 |
12% |
|||||||
Sales, general and administrative |
237,087 |
198,660 |
19% |
851,428 |
731,997 |
16% |
|||||||
412,984 |
342,806 |
20% |
1,471,355 |
1,283,842 |
15% |
||||||||
Operating income |
106,770 |
82,244 |
30% |
388,447 |
358,626 |
8% |
|||||||
Other income (expense): |
|||||||||||||
Interest and other income |
3,534 |
1,930 |
83% |
10,774 |
4,629 |
133% |
|||||||
Interest and other expense |
(4,706) |
(4,814) |
(2%) |
(18,161) |
(17,519) |
4% |
|||||||
(1,172) |
(2,884) |
(59%) |
(7,387) |
(12,890) |
(43%) |
||||||||
Income from continuing operations before income taxes |
105,598 |
79,360 |
33% |
381,060 |
345,736 |
10% |
|||||||
Provision for income taxes |
(29,432) |
(21,143) |
39% |
(109,459) |
(98,590) |
11% |
|||||||
Income from continuing operations including noncontrolling interests |
76,166 |
58,217 |
31% |
271,601 |
247,146 |
10% |
|||||||
Less: Net income attributable to noncontrolling interests, net of tax |
(6,315) |
(5,177) |
22% |
(23,876) |
(17,142) |
39% |
|||||||
Net income from continuing operations attributable to Global Payments |
$ 69,851 |
$ 53,040 |
32% |
$ 247,725 |
$ 230,004 |
8% |
|||||||
Basic earnings per share |
$ 0.87 |
$ 0.65 |
34% |
$ 3.10 |
$ 2.84 |
9% |
|||||||
Diluted earnings per share |
$ 0.86 |
$ 0.65 |
32% |
$ 3.08 |
$ 2.80 |
10% |
|||||||
Weighted average shares outstanding: |
|||||||||||||
Basic |
80,222 |
81,203 |
79,837 |
81,075 |
|||||||||
Diluted |
81,045 |
82,142 |
80,478 |
82,120 |
|||||||||
NM - Not Meaningful |
|||||||||||||
Cash earnings exclude normalized adjustments and acquisition intangible amortization expense from continuing operations and the related income tax benefit. See Schedules 7 and 8 for reconciliations of cash earnings from continuing operations to GAAP. |
|||||||||||||
SCHEDULE 4 |
|||||||||||||||||||||
SEGMENT INFORMATION CONTINUING OPERATIONS |
|||||||||||||||||||||
GLOBAL PAYMENTS INC. AND SUBSIDIARIES |
|||||||||||||||||||||
(In thousands) |
|||||||||||||||||||||
Three Months Ended May 31, |
|||||||||||||||||||||
2011 |
2010 |
% Change |
|||||||||||||||||||
GAAP |
Normalized |
Cash Earnings |
GAAP |
Normalized |
Cash Earnings |
GAAP |
Normalized |
Cash Earnings |
|||||||||||||
Revenues: |
|||||||||||||||||||||
United States |
$ 281,500 |
$ 281,500 |
$ 281,500 |
$ 242,975 |
$ 242,975 |
$ 242,975 |
16% |
16% |
16% |
||||||||||||
Canada |
87,140 |
87,140 |
87,140 |
80,720 |
80,720 |
80,720 |
8% |
8% |
8% |
||||||||||||
North America merchant services |
368,640 |
368,640 |
368,640 |
323,695 |
323,695 |
323,695 |
14% |
14% |
14% |
||||||||||||
Europe |
115,359 |
115,359 |
115,359 |
72,238 |
72,238 |
72,238 |
60% |
60% |
60% |
||||||||||||
Asia-Pacific |
35,755 |
35,755 |
35,755 |
29,117 |
29,117 |
29,117 |
23% |
23% |
23% |
||||||||||||
International merchant services |
151,114 |
151,114 |
151,114 |
101,355 |
101,355 |
101,355 |
49% |
49% |
49% |
||||||||||||
Total revenues |
$ 519,754 |
$ 519,754 |
$ 519,754 |
$ 425,050 |
$ 425,050 |
$ 425,050 |
22% |
22% |
22% |
||||||||||||
Operating income: |
|||||||||||||||||||||
North America merchant services |
$ 69,816 |
$ 69,816 |
$ 73,085 |
$ 64,966 |
$ 64,966 |
$ 67,848 |
7% |
7% |
8% |
||||||||||||
International merchant services |
41,632 |
41,632 |
52,569 |
25,346 |
25,346 |
30,640 |
64% |
64% |
72% |
||||||||||||
Corporate |
(23,305) |
(18,884) |
(18,884) |
(18,827) |
(16,244) |
(16,244) |
(24%) |
(16%) |
(16%) |
||||||||||||
Operating income |
$ 88,143 |
$ 92,564 |
$ 106,770 |
$ 71,485 |
$ 74,068 |
$ 82,244 |
23% |
25% |
30% |
||||||||||||
Year Ended May 31, |
|||||||||||||||||||||
2011 |
2010 |
% Change |
|||||||||||||||||||
GAAP |
Normalized |
Cash Earnings |
GAAP |
Normalized |
Cash Earnings |
GAAP |
Normalized |
Cash Earnings |
|||||||||||||
Revenues: |
|||||||||||||||||||||
United States |
$ 1,031,997 |
$ 1,031,997 |
$ 1,031,997 |
$ 902,844 |
$ 902,844 |
$ 902,844 |
14% |
14% |
14% |
||||||||||||
Canada |
330,872 |
330,872 |
330,872 |
317,272 |
317,272 |
317,272 |
4% |
4% |
4% |
||||||||||||
North America merchant services |
1,362,869 |
1,362,869 |
1,362,869 |
1,220,116 |
1,220,116 |
1,220,116 |
12% |
12% |
12% |
||||||||||||
Europe |
359,567 |
359,567 |
359,567 |
315,023 |
315,023 |
315,023 |
14% |
14% |
14% |
||||||||||||
Asia-Pacific |
137,366 |
137,366 |
137,366 |
107,329 |
107,329 |
107,329 |
28% |
28% |
28% |
||||||||||||
International merchant services |
496,933 |
496,933 |
496,933 |
422,352 |
422,352 |
422,352 |
18% |
18% |
18% |
||||||||||||
Total revenues |
$ 1,859,802 |
$ 1,859,802 |
$ 1,859,802 |
$ 1,642,468 |
$ 1,642,468 |
$ 1,642,468 |
13% |
13% |
13% |
||||||||||||
Operating income: |
|||||||||||||||||||||
North America merchant services |
$ 268,233 |
$ 268,233 |
$ 280,880 |
$ 275,386 |
$ 275,386 |
$ 285,989 |
(3%) |
(3%) |
(2%) |
||||||||||||
International merchant services |
143,911 |
143,911 |
172,956 |
113,699 |
113,699 |
135,860 |
27% |
27% |
27% |
||||||||||||
Corporate |
(80,550) |
(65,389) |
(65,389) |
(65,806) |
(63,223) |
(63,223) |
(22%) |
(3%) |
(3%) |
||||||||||||
Operating income |
$ 331,594 |
$ 346,755 |
$ 388,447 |
$ 323,279 |
$ 325,862 |
$ 358,626 |
3% |
6% |
8% |
||||||||||||
See Schedule 9 for reconciliation of normalized and cash earnings segment information to GAAP. |
|||||||||||||||||||||
SCHEDULE 5 |
|||||
CONSOLIDATED BALANCE SHEETS |
|||||
GLOBAL PAYMENTS INC. AND SUBSIDIARIES |
|||||
(In thousands) |
|||||
May 31, |
May 31, |
||||
2011 |
2010 |
||||
ASSETS |
|||||
Current assets: |
|||||
Cash and cash equivalents |
$ 1,354,285 |
$ 769,946 |
|||
Accounts receivable, net of allowances for doubtful accounts of $472 and $269, respectively |
166,540 |
131,817 |
|||
Claims receivable, net of allowance for losses of $3,870 and $4,208, respectively |
914 |
664 |
|||
Settlement processing assets |
280,359 |
13,741 |
|||
Inventory |
7,640 |
9,740 |
|||
Deferred income taxes |
2,946 |
2,752 |
|||
Prepaid expenses and other current assets |
35,291 |
39,604 |
|||
Total current assets |
1,847,975 |
968,264 |
|||
Goodwill |
779,637 |
569,090 |
|||
Other intangible assets, net of accumulated amortization of $197,066 and $145,076, respectively |
341,500 |
205,110 |
|||
Property and equipment, net of accumulated depreciation of $147,670 and $119,402, respectively |
256,301 |
183,938 |
|||
Deferred income taxes |
104,140 |
90,470 |
|||
Other |
20,978 |
22,454 |
|||
Total assets |
$ 3,350,531 |
$ 2,039,326 |
|||
LIABILITIES AND EQUITY |
|||||
Current liabilities: |
|||||
Lines of credit |
$ 270,745 |
$ 79,187 |
|||
Current portion of long-term debt |
85,802 |
148,169 |
|||
Accounts payable and accrued liabilities |
241,578 |
173,575 |
|||
Settlement processing obligations |
838,565 |
265,110 |
|||
Income taxes payable |
7,674 |
6,430 |
|||
Total current liabilities |
1,444,364 |
672,471 |
|||
Long-term debt |
268,217 |
272,965 |
|||
Deferred income taxes |
116,432 |
88,265 |
|||
Other long-term liabilities |
49,843 |
31,436 |
|||
Total liabilities |
1,878,856 |
1,065,137 |
|||
Commitments and contingencies |
|||||
Redeemable noncontrolling interest |
133,858 |
102,672 |
|||
Equity: |
|||||
Preferred stock, no par value; 5,000,000 shares authorized and none issued |
- |
- |
|||
Common stock, no par value; 200,000,000 shares authorized; 83,062,518 issued |
|||||
and 80,334,781 outstanding at May 31, 2011 and 82,028,945 issued and |
|||||
79,646,055 outstanding at May 31, 2010 |
- |
- |
|||
Paid-in capital |
502,993 |
460,747 |
|||
Retained earnings |
715,202 |
544,772 |
|||
Treasury stock; 2,727,737 and 2,382,890 shares at May 31, 2011 and May 31, 2010, |
|||||
respectively |
(112,980) |
(100,000) |
|||
Accumulated other comprehensive income (loss) |
79,320 |
(44,255) |
|||
Total Global Payments shareholders' equity |
1,184,535 |
861,264 |
|||
Noncontrolling interest |
153,282 |
10,253 |
|||
Total equity |
1,337,817 |
871,517 |
|||
Total liabilities and equity |
$ 3,350,531 |
$ 2,039,326 |
|||
SCHEDULE 6 |
|||||||
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||
GLOBAL PAYMENTS INC. AND SUBSIDIARIES |
|||||||
(In thousands) |
|||||||
Year Ended May 31, |
|||||||
2011 |
2010 |
||||||
Cash flows from operating activities: |
|||||||
Net income including noncontrolling interests |
$ 228,156 |
$ 219,109 |
|||||
Adjustments to reconcile net income to net cash provided by operating activities: |
|||||||
Depreciation and amortization of property and equipment |
40,545 |
35,864 |
|||||
Amortization of acquired intangibles |
41,692 |
32,803 |
|||||
Provision for operating losses and bad debts |
20,577 |
25,025 |
|||||
Share-based compensation expense |
15,885 |
18,072 |
|||||
Deferred income taxes |
19,154 |
2,722 |
|||||
Loss on disposal of discontinued operations |
602 |
24,310 |
|||||
Other, net |
(3,576) |
2,443 |
|||||
Changes in operating assets and liabilities, net of the effects of acquisitions: |
|||||||
Accounts receivable |
(34,723) |
(11,689) |
|||||
Claims receivable |
(14,425) |
(14,936) |
|||||
Settlement processing assets and obligations, net |
299,895 |
140,962 |
|||||
Inventory |
1,979 |
(4,727) |
|||||
Prepaid expenses and other assets |
3,537 |
(13,710) |
|||||
Accounts payable and other accrued liabilities |
89,230 |
18,803 |
|||||
Payables to money transfer beneficiaries |
- |
(6,107) |
|||||
Income taxes payable |
1,244 |
(3,183) |
|||||
Net cash provided by operating activities |
709,772 |
465,761 |
|||||
Cash flows from investing activities: |
|||||||
Business and intangible asset acquisitions, net of cash acquired |
(167,968) |
(29,513) |
|||||
Disposition of business, net of cash |
(2,577) |
60,231 |
|||||
Capital expenditures |
(98,537) |
(56,054) |
|||||
Net decrease (increase) in financing receivables |
2,062 |
(179) |
|||||
Proceeds from sale of investment and contractual rights, net |
- |
311 |
|||||
Net cash used in investing activities |
(267,020) |
(25,204) |
|||||
Cash flows from financing activities: |
|||||||
Net borrowings on lines of credit |
191,558 |
69,013 |
|||||
Proceeds from issuance of long-term debt |
205,298 |
305,744 |
|||||
Principal payments under long-term debt |
(280,198) |
(75,205) |
|||||
Acquisition of redeemable noncontrolling interests |
- |
(307,675) |
|||||
Proceeds from stock issued under share-based compensation plans, net |
18,364 |
30,248 |
|||||
Repurchase of common stock |
(14,900) |
(98,080) |
|||||
Tax benefit from share-based compensation |
9,141 |
7,186 |
|||||
Distribution to noncontrolling interests |
(8,752) |
(20,484) |
|||||
Dividends paid |
(6,388) |
(6,497) |
|||||
Net cash provided by (used in) financing activities |
114,123 |
(95,750) |
|||||
Effect of exchange rate changes on cash |
27,464 |
(1,796) |
|||||
Increase in cash and cash equivalents |
584,339 |
343,011 |
|||||
Cash and cash equivalents, beginning of period |
769,946 |
426,935 |
|||||
Cash and cash equivalents, end of period |
$ 1,354,285 |
$ 769,946 |
|||||
SCHEDULE 7 |
|||||||
RECONCILIATION OF QUARTERLY NORMALIZED AND CASH EARNINGS FROM CONTINUING OPERATIONS ATTRIBUTABLE TO GLOBAL PAYMENTS TO GAAP |
|||||||
GLOBAL PAYMENTS INC. AND SUBSIDIARIES |
|||||||
(In thousands, except per share data) |
|||||||
Three Months Ended May 31, |
|||||||
2011 |
|||||||
GAAP |
Employee Termination |
Normalized |
Cash Earnings Adjustments(2) |
Cash Earnings |
|||
Revenues |
$ 519,754 |
$ - |
$ 519,754 |
$ - |
$ 519,754 |
||
Operating expenses: |
|||||||
Cost of service |
191,440 |
(1,337) |
190,103 |
(14,206) |
175,897 |
||
Sales, general and administrative |
240,171 |
(3,084) |
237,087 |
- |
237,087 |
||
431,611 |
(4,421) |
427,190 |
(14,206) |
412,984 |
|||
Operating income |
88,143 |
4,421 |
92,564 |
14,206 |
106,770 |
||
Other income (expense): |
|||||||
Interest and other income |
3,534 |
- |
3,534 |
- |
3,534 |
||
Interest and other expense |
(4,706) |
- |
(4,706) |
- |
(4,706) |
||
(1,172) |
- |
(1,172) |
- |
(1,172) |
|||
Income from continuing operations before income taxes |
86,971 |
4,421 |
91,392 |
14,206 |
105,598 |
||
Provision for income taxes |
(24,587) |
(1,475) |
(26,062) |
(3,370) |
(29,432) |
||
Income from continuing operations |
62,384 |
2,946 |
65,330 |
10,836 |
76,166 |
||
Less: Net income attributable to noncontrolling interests, net of tax |
(3,779) |
- |
(3,779) |
(2,536) |
(6,315) |
||
Net income from continuing operations attributable to Global Payments |
$ 58,605 |
$ 2,946 |
$ 61,551 |
$ 8,300 |
$ 69,851 |
||
Diluted shares |
81,045 |
81,045 |
81,045 |
||||
Diluted earnings per share |
$ 0.72 |
$ 0.04 |
$ 0.76 |
$ 0.10 |
$ 0.86 |
||
Three Months Ended May 31, |
|||||||
2010 |
|||||||
GAAP |
Employee Termination |
Normalized |
Cash Earnings Adjustments(2) |
Cash Earnings |
|||
Revenues |
$ 425,050 |
$ - |
$ 425,050 |
$ - |
$ 425,050 |
||
Operating expenses: |
|||||||
Cost of service |
152,322 |
- |
152,322 |
(8,176) |
144,146 |
||
Sales, general and administrative |
201,243 |
(2,583) |
198,660 |
- |
198,660 |
||
353,565 |
(2,583) |
350,982 |
(8,176) |
342,806 |
|||
Operating income |
71,485 |
2,583 |
74,068 |
8,176 |
82,244 |
||
Other income (expense): |
|||||||
Interest and other income |
1,930 |
- |
1,930 |
- |
1,930 |
||
Interest and other expense |
(4,814) |
- |
(4,814) |
- |
(4,814) |
||
(2,884) |
- |
(2,884) |
- |
(2,884) |
|||
Income from continuing operations before income taxes |
68,601 |
2,583 |
71,184 |
8,176 |
79,360 |
||
Provision for income taxes |
(17,890) |
(946) |
(18,836) |
(2,307) |
(21,143) |
||
Income from continuing operations |
50,711 |
1,637 |
52,348 |
5,869 |
58,217 |
||
Less: Net income attributable to noncontrolling interests, net of tax |
(4,842) |
- |
(4,842) |
(335) |
(5,177) |
||
Net income from continuing operations attributable to Global Payments |
$ 45,869 |
$ 1,637 |
$ 47,506 |
$ 5,534 |
$ 53,040 |
||
Diluted shares |
82,142 |
82,142 |
82,142 |
||||
Diluted earnings per share |
$ 0.56 |
$ 0.02 |
$ 0.58 |
$ 0.07 |
$ 0.65 |
||
(1) Reflects expenses of $2.6 million during the three months ended May 31, 2011, of start-up costs related to our new Global Service Center in Manila, Philippines and expenses of $1.8 million and $2.6 million during the three months ended May 31, 2011 and 2010, respectively, related to employee termination and relocation benefits, and the related income tax benefits |
|||||||
|
|||||||
We supplemented our reporting of income from continuing operations and the related earnings per share information determined in accordance with GAAP by reporting income from continuing operations and the related earnings per share for the three months ended May 31, 2011 and 2010 on a “normalized” and "cash earnings" basis in this earnings release as a measure to help evaluate performance. We calculated income from continuing operations and earnings per share on a normalized basis by excluding charges related to employee termination and relocation benefits, and certain one-time costs related to our Global Service Center. We calculated income from continuing operations on a cash earnings basis by excluding acquisition intangible amortization expense from our normalized 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 income from continuing operations and earnings per share reported on a normalized and cash earnings basis should be considered in addition to, and not as a substitute for, income from continuing operations and earnings per share determined in accordance with GAAP. Our measures of income from continuing operations and earnings per share on a normalized and 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 ANNUAL NORMALIZED AND CASH EARNINGS FROM CONTINUING OPERATIONS ATTRIBUTABLE TO GLOBAL PAYMENTS TO GAAP |
||||||||
GLOBAL PAYMENTS INC. AND SUBSIDIARIES |
||||||||
(In thousands, except per share data) |
||||||||
Year Ended May 31, |
||||||||
2011 |
||||||||
GAAP |
Employee Termination and |
Foreign Tax Rate(2) |
Normalized |
Cash Earnings Adjustments(3) |
Cash Earnings |
|||
Revenues |
$ 1,859,802 |
$ - |
$ - |
$ 1,859,802 |
$ - |
$ 1,859,802 |
||
Operating expenses: |
||||||||
Cost of service |
665,017 |
(3,398) |
- |
661,619 |
(41,692) |
619,927 |
||
Sales, general and administrative |
863,191 |
(11,763) |
- |
851,428 |
- |
851,428 |
||
1,528,208 |
(15,161) |
- |
1,513,047 |
(41,692) |
1,471,355 |
|||
Operating income |
331,594 |
15,161 |
- |
346,755 |
41,692 |
388,447 |
||
Other income (expense): |
||||||||
Interest and other income |
10,774 |
- |
- |
10,774 |
- |
10,774 |
||
Interest and other expense |
(18,161) |
- |
- |
(18,161) |
- |
(18,161) |
||
(7,387) |
- |
- |
(7,387) |
- |
(7,387) |
|||
Income from continuing operations before income taxes |
324,207 |
15,161 |
- |
339,368 |
41,692 |
381,060 |
||
Provision for income taxes |
(95,076) |
(4,949) |
2,479 |
(97,546) |
(11,913) |
(109,459) |
||
Income from continuing operations |
229,131 |
10,212 |
2,479 |
241,822 |
29,779 |
271,601 |
||
Less: Net income attributable to noncontrolling interests, net of tax |
(18,918) |
- |
- |
(18,918) |
(4,958) |
(23,876) |
||
Net income from continuing operations attributable to Global Payments |
$ 210,213 |
$ 10,212 |
$ 2,479 |
$ 222,904 |
$ 24,821 |
$ 247,725 |
||
Diluted shares |
80,478 |
80,478 |
80,478 |
|||||
Diluted earnings per share |
$ 2.61 |
$ 0.13 |
$ 0.03 |
$ 2.77 |
$ 0.31 |
$ 3.08 |
||
Year Ended May 31, |
||||||||
2010 |
||||||||
GAAP |
Employee Termination and |
Normalized |
Cash Earnings Adjustments(3) |
Cash Earnings |
||||
Revenues |
$ 1,642,468 |
$ - |
$ 1,642,468 |
$ - |
$ 1,642,468 |
|||
Operating expenses: |
||||||||
Cost of service |
584,609 |
- |
584,609 |
(32,764) |
551,845 |
|||
Sales, general and administrative |
734,580 |
(2,583) |
731,997 |
- |
731,997 |
|||
1,319,189 |
(2,583) |
1,316,606 |
(32,764) |
1,283,842 |
||||
Operating income |
323,279 |
2,583 |
325,862 |
32,764 |
358,626 |
|||
Other income (expense): |
||||||||
Interest and other income |
4,629 |
- |
4,629 |
- |
4,629 |
|||
Interest and other expense |
(17,519) |
- |
(17,519) |
- |
(17,519) |
|||
(12,890) |
- |
(12,890) |
- |
(12,890) |
||||
Income from continuing operations before income taxes |
310,389 |
2,583 |
312,972 |
32,764 |
345,736 |
|||
Provision for income taxes |
(87,379) |
(946) |
(88,325) |
(10,265) |
(98,590) |
|||
Income from continuing operations |
223,010 |
1,637 |
224,647 |
22,499 |
247,146 |
|||
Less: Net income attributable to noncontrolling interests, net of tax |
(15,792) |
- |
(15,792) |
(1,350) |
(17,142) |
|||
Net income from continuing operations attributable to Global Payments |
$ 207,218 |
$ 1,637 |
$ 208,855 |
$ 21,149 |
$ 230,004 |
|||
Diluted shares |
82,120 |
82,120 |
82,120 |
|||||
Diluted earnings per share |
$ 2.52 |
$ 0.02 |
$ - |
$ 2.54 |
$ 0.26 |
$ 2.80 |
||
(1) Reflects expenses of $7.4 million during the year ended May 31, 2011, of start-up costs related to our Global Service Center in Manila, Philippines and expenses of $7.8 million and $2.6 million during the years ended May 31, 2011 and 2010, respectively, related to employee termination and relocation benefits, and the related income tax benefits. |
||||||||
|
||||||||
(3) Represents adjustments to cost of service to exclude acquisition intangible amortization expense from continuing operations and the related income tax benefit. |
||||||||
We supplemented our reporting of income from continuing operations and the related earnings per share information determined in accordance with GAAP by reporting income from continuing operations and the related earnings per share for the years ended May 31, 2011 and 2010 on a “normalized” and "cash earnings" basis in this earnings release as a measure to help evaluate performance. We calculated income from continuing operations and earnings per share on a normalized basis by excluding charges related to employee termination and relocation benefits, certain one-time costs related to our new Global Service Center and the legislated tax rate reduction. We calculated income from continuing operations on a cash earnings basis by excluding acquisition intangible amortization expense from our normalized 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 income from continuing operations and earnings per share reported on a normalized and cash earnings basis should be considered in addition to, and not as a substitute for, income from continuing operations and earnings per share determined in accordance with GAAP. Our measures of income from continuing operations and earnings per share on a normalized and cash earnings basis reflect management’s judgment of particular items, and may not be comparable to similarly titled measures reported by other companies. |
||||||||
SCHEDULE 9 |
|||||||||||||||
RECONCILIATION OF CASH EARNINGS SEGMENT INFORMATION TO GAAP |
|||||||||||||||
GLOBAL PAYMENTS INC. AND SUBSIDIARIES |
|||||||||||||||
(In thousands) |
|||||||||||||||
Three Months Ended May 31, |
|||||||||||||||
2011 |
2010 |
||||||||||||||
GAAP |
Employee Termination and Other(1) |
Normalized |
Cash Earnings Adjustments (2) |
Cash Earnings |
GAAP |
Employee Termination and Other(1) |
Normalized |
Cash Earnings Adjustments (2) |
Cash Earnings |
||||||
Revenues: |
|||||||||||||||
United States |
$ 281,500 |
$ - |
$ 281,500 |
$ - |
$ 281,500 |
$ 242,975 |
$ - |
$ 242,975 |
$ - |
$ 242,975 |
|||||
Canada |
87,140 |
- |
87,140 |
- |
87,140 |
80,720 |
- |
80,720 |
- |
80,720 |
|||||
North America merchant services |
368,640 |
- |
368,640 |
- |
368,640 |
323,695 |
- |
323,695 |
- |
323,695 |
|||||
Europe |
115,359 |
- |
115,359 |
- |
115,359 |
72,238 |
- |
72,238 |
- |
72,238 |
|||||
Asia-Pacific |
35,755 |
- |
35,755 |
- |
35,755 |
29,117 |
- |
29,117 |
- |
29,117 |
|||||
International merchant services |
151,114 |
- |
151,114 |
- |
151,114 |
101,355 |
- |
101,355 |
- |
101,355 |
|||||
Total revenues |
$ 519,754 |
$ - |
$ 519,754 |
$ - |
$ 519,754 |
$ 425,050 |
$ - |
$ 425,050 |
$ - |
$ 425,050 |
|||||
Operating income: |
|||||||||||||||
North America merchant services |
$ 69,816 |
$ - |
$ 69,816 |
$ 3,269 |
$ 73,085 |
$ 64,966 |
$ - |
$ 64,966 |
$ 2,882 |
$ 67,848 |
|||||
International merchant services |
41,632 |
- |
41,632 |
10,937 |
52,569 |
25,346 |
- |
25,346 |
5,294 |
30,640 |
|||||
Corporate |
(23,305) |
4,421 |
(18,884) |
- |
(18,884) |
(18,827) |
2,583 |
(16,244) |
- |
(16,244) |
|||||
Operating income |
$ 88,143 |
$ 4,421 |
$ 92,564 |
$ 14,206 |
$ 106,770 |
$ 71,485 |
$ 2,583 |
$ 74,068 |
$ 8,176 |
$ 82,244 |
|||||
Year Ended May 31, |
|||||||||||||||
2011 |
2010 |
||||||||||||||
GAAP |
Employee Termination and Other(1) |
Normalized |
Cash Earnings Adjustments (2) |
Cash Earnings |
GAAP |
Employee Termination and Other(1) |
Normalized |
Cash Earnings Adjustments (2) |
Cash Earnings |
||||||
Revenues: |
|||||||||||||||
United States |
$ 1,031,997 |
$ - |
$ 1,031,997 |
$ - |
$ 1,031,997 |
$ 902,844 |
$ - |
$ 902,844 |
$ - |
$ 902,844 |
|||||
Canada |
330,872 |
- |
330,872 |
- |
330,872 |
317,272 |
- |
317,272 |
- |
317,272 |
|||||
North America merchant services |
1,362,869 |
- |
1,362,869 |
- |
1,362,869 |
1,220,116 |
- |
1,220,116 |
- |
1,220,116 |
|||||
Europe |
359,567 |
- |
359,567 |
- |
359,567 |
315,023 |
- |
315,023 |
- |
315,023 |
|||||
Asia-Pacific |
137,366 |
- |
137,366 |
- |
137,366 |
107,329 |
- |
107,329 |
- |
107,329 |
|||||
International merchant services |
496,933 |
- |
496,933 |
- |
496,933 |
422,352 |
- |
422,352 |
- |
422,352 |
|||||
Total revenues |
$ 1,859,802 |
$ - |
$ 1,859,802 |
$ - |
$ 1,859,802 |
$ 1,642,468 |
$ - |
$ 1,642,468 |
$ - |
$ 1,642,468 |
|||||
Operating income: |
|||||||||||||||
North America merchant services |
$ 268,233 |
$ - |
$ 268,233 |
$ 12,647 |
$ 280,880 |
$ 275,386 |
$ - |
$ 275,386 |
$ 10,603 |
$ 285,989 |
|||||
International merchant services |
143,911 |
- |
143,911 |
29,045 |
172,956 |
113,699 |
- |
113,699 |
22,161 |
135,860 |
|||||
Corporate |
(80,550) |
15,161 |
(65,389) |
- |
(65,389) |
(65,806) |
2,583 |
(63,223) |
- |
(63,223) |
|||||
Operating income |
$ 331,594 |
$ 15,161 |
$ 346,755 |
$ 41,692 |
$ 388,447 |
$ 323,279 |
$ 2,583 |
$ 325,862 |
$ 32,764 |
$ 358,626 |
|||||
(1) Normalized results exclude expenses consisting of $2.6 million and $7.4 million during the three and twelve months ended May 31, 2011, respectively, of start-up costs related to our new Global Service Center in Manila, Philippines and expenses of $1.8 million and $7.8 million during the three and twelve months ended May 31, 2011, respectively, related to employee termination and relocation benefits. During the three and twelve months ended May 31, 2010, normalized results exclude amounts due to our former President and Chief Operating Officer pursuant to his termination agreement dated April 21, 2010. |
|||||||||||||||
(2) Represents acquisition intangible amortization expense from continuing operations. |
|||||||||||||||
SCHEDULE 10 |
|||||||||
OUTLOOK SUMMARY |
|||||||||
GLOBAL PAYMENTS INC. AND SUBSIDIARIES |
|||||||||
(In millions, except per share data) |
|||||||||
Fiscal 2011 Actual |
Fiscal 2012 Outlook |
% Change FY11 |
|||||||
Revenue Outlook |
|||||||||
Revenues |
$ 1,860 |
$2,100 to 2,150 |
13% to 16% |
||||||
EPS Outlook |
|||||||||
GAAP diluted EPS from continuing operations |
$ 2.61 |
$3.02 to $3.09 |
16% to 18% |
||||||
Non-recurring items and acquisition-related intangibles |
0.47 |
(1) |
$0.34 |
--- |
|||||
Cash EPS from continuing operations |
$ 3.08 |
$3.35 to $3.43 |
9% to 11% |
||||||
(1) Non-recurring items accounted for $0.16 and acquisition-related intangibles accounted for $0.31 in Fiscal 2011 results. |
|||||||||
Contact: |
Jane M. Elliott |
|
770-829-8234 Voice |
||
770-829-8267 Fax |
||
SOURCE Global Payments Inc.
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