TSYS Announces First Quarter 2010 Financial Results
Columbus, Ga., April 20, 2010 — TSYS (NYSE: TSS) today reported results for the first quarter of 2010. Total revenues were $415.4 million for an increase of 1.6% over 2009.
Income from continuing operations increased 3.1% to $51.8 million and net income was up 10.3% compared to 2009. Basic earnings per share (EPS) from continuing operations were $0.26.
As previously reported, TSYS completed its acquisition of 51% of Omaha, Nebraska-based First National Merchant Solutions, LLC (FNMS) on April 1, 2010. TSYS will consolidate this new entity in its financial statements in its Merchant Services segment for the remaining nine months of 2010. TSYS’ guidance for 2010 has been updated to reflect this acquisition. For 2010, it is expected that FNMS will contribute $95 to $97 million to TSYS’ total revenues; $2 to $3 million to net income, net of acquisition costs of approximately $2.5 million; and approximately $0.01 to basic earnings per share. While TSYS will consolidate and report all of FNMS’ revenues and expenses, it will report only 51% of FNMS’ net income.
“Our new FNMS joint venture is transformational for TSYS as it advances our goal to diversify our business from being just a transaction processor to being a full service payments company. FNMS is a “top-tier” merchant acquirer with a deep and talented pool of experienced management and team members that mirrors our TSYS culture,” said Philip W. Tomlinson, chairman of the board and chief executive officer of TSYS.
“With the economy showing signs of improvement for the first time in two years, we remain optimistic about our ability to achieve our original guidance for 2010, and are pleased to be able to raise it as a result of the FNMS joint venture,” added Tomlinson.
TSYS also announced today a new stock repurchase plan to purchase up to 10 million shares of TSYS stock. This equates to approximately $162 million of TSYS stock based on current market prices. The shares may be purchased from time to time over the next two years at prices considered attractive to the company.
TSYS’ revised guidance for 2010 is set forth below and includes the impact of deconverted portfolios (whether as the result of bank failures, portfolio sales or otherwise), price compression, reduction in one-time termination fees and currency impact, and the current economic environment of the credit card market.
| 2010 Revised Guidance |
||
| Range (in millions, except per share amounts) |
Percent Change |
|
| Total Revenues | $1,711 to $1,745 | 1% to 3% |
| Reimbursable items | $279 to $284 | 3% to 5% |
| Revenues before reimbursable items |
$1,432 to $1,461 | 1% to 3% |
| Income from continuing operations | $189 to $194 | (14%) to (12%) |
| EPS from continuing operations |
$0.96 to $0.98 |
(14%) to (12%) |
| Average Shares Outstanding |
197.3 |
|
Conference Call
TSYS will host its quarterly conference call at 5:00 p.m. ET on Tuesday, April 20. The conference call can be accessed via simultaneous Internet broadcast at tsys.com by clicking on the link under "Webcasts" on the main homepage. The replay will be archived for 12 months and will be available approximately 30 minutes after the completion of the call. A slide presentation to accompany the call will be available by clicking on the link under "Webcasts" on the main homepage of tsys.com.
Non-GAAP Measures
The financial highlights section of this release contains the non-GAAP financial measures of revenues and operating results on a constant currency basis to describe TSYS’ performance. Management uses these non-GAAP financial measures to better understand and assess TSYS’ operating results and financial performance. TSYS believes these non-GAAP financial measures provide meaningful additional information about TSYS to assist investors in understanding and evaluating its operating results.
Additional information about non-GAAP financial measures and a reconciliation of those measures to the most directly comparable GAAP measures are included on page 11 of this release.
About TSYS
TSYS (NYSE: TSS) is one of the world’s largest companies for outsourced payment services, offering a broad range of issuer- and acquirer-processing technologies that support consumer-finance, credit, debit, healthcare, loyalty and prepaid services for financial institutions and retail companies in the Americas, EMEA and Asia-Pacific regions. For more information contact news@tsys.com or log on to www.tsys.com. TSYS routinely posts all important information on its Web site.
Forward-Looking Statements
This press release contains statements that constitute "forward-looking statements" within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934 as amended by the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, among others, statements regarding the expected impact of the FNMS joint venture on TSYS’ 2010 total revenues, net income and basic earnings per share, TSYS’ earnings guidance for 2010 total revenues, revenues before reimbursable items, income from continuing operations and EPS from continuing operations, and the assumptions underlying such statements including, with respect to TSYS’ earnings guidance for 2010: (1) the economy will not worsen during 2010; (2) there will be no deconversions of large clients during the year other than as previously announced; (3) there will be no significant movement in foreign currency exchange rates related to TSYS’ business during 2010; (4) the anticipated levels in employment, technology and other expenses, which are included in 2010 estimates, will be accomplished; (5) TSYS will not incur significant expenses associated with the conversion of new large clients or acquisitions, or any significant impairment of goodwill or other intangibles; and (6) there will be no significant movements in LIBOR, and no significant draws on the remaining balance of TSYS’ revolving credit facility. These statements are based on the current beliefs and expectations of TSYS' management and are subject to significant risks and uncertainties. Actual results may differ materially from those contemplated by the forward-looking statements. A number of important factors could cause actual results to differ materially from those contemplated by our forward-looking statements in this press release. Many of these factors are beyond TSYS' ability to control or predict. These factors include, but are not limited to: (1) one or more of the assumptions set forth above upon which TSYS’ 2010 earnings guidance is based is inaccurate; (2) adverse developments with respect to entering into contracts with new clients and retaining current clients; (3) continued consolidation and turmoil in the financial services and other industries during 2010, including the merger of TSYS clients with entities that are not TSYS processing clients, the sale of portfolios by TSYS clients to entities that are not TSYS processing clients and the nationalization or seizure by banking regulators of TSYS clients; (4) TSYS is unable to control expenses and increase market share both domestically and internationally; (5) TSYS is unable to manage the impact of slowing economic conditions and consumer spending; (6) the material breach of security of any of TSYS' systems; (7) the impact of potential and completed acquisitions, including the costs associated therewith and their being more difficult to integrate than anticipated; (8) changes occur in laws, rules, regulations, credit card association rules or other industry standards affecting TSYS’ business which require significant product development efforts or reduce the market demand for or value of its products; (9) adverse developments with respect to the credit card industry in general, including a decline in the use of credit cards as a payment mechanism; and (10) internal growth rates of TSYS’ existing clients are lower than anticipated whether as a result of unemployment rates, card delinquencies and charge-off rates or otherwise. Additional factors that could cause actual results to differ materially from those contemplated in this release can be found in TSYS' filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. We believe these forward-looking statements are reasonable; however, undue reliance should not be placed on any forward-looking statements, which are based on current expectations. We do not assume any obligation to update any forward-looking statements as a result of new information, future developments or otherwise.
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Slide Presentation
Contacts
Shawn Roberts
TSYS Investor Relations
+1.706.644.6081
shawnroberts@tsys.com