Global Payments Inc. (GPN), a leading, worldwide provider of electronic transaction processing solutions, today announced results for its fiscal first quarter ended August 31, 2012.
First Quarter 2013 Summary
- Revenue grew 9% to $590.3 millioncompared to $542.8 million in the first quarter of 2012.
- Cash diluted earnings per share1 were $0.87 compared to $0.88 in the first quarter of 2012.
- GAAP diluted earnings per share were $0.59, compared to $0.79 in the first quarter of 2012, and included processing system intrusion charges of $0.20.
- On a constant currency basis, revenue and cash diluted earnings per share grew 12% and 3%, respectively.
Chairman and CEO Paul R. Garcia said, "We are executing on our fiscal 2013 goals and initiatives while we make steady progress on the data intrusion remediation. We anticipate closing our two previously announced acquisitions, the remaining 44 percent ownership interest in our Asia-Pacific joint venture and the U.S. based Accelerated Payment Technologies business, in the second quarter. These transactions support our strategy of driving long-term growth and shareholder value.
"Also, in keeping with the company's strategy to provide comprehensive payment options to our customers, we are pleased to announce the recent signing of an agreement with Discover Financial Services to offer PayPal acceptance to our extensive U.S. merchant base," continued Mr. Garcia.
Acquisition Closings and Funding
Global Payments anticipates closing the Accelerated Payment Technologies (APT) acquisition for $413 million in October. APT is an innovative provider of fully-integrated payment technology solutions for small to medium sized merchants. APT markets its products and services primarily through a network of 700 value-added resellers (VARs) covering over 30 different vertical markets. In addition, the company anticipates closing the previously announced acquisition of the remaining 44% ownership interest in the Asia-Pacific joint venture for $242 million during the second quarter.
In the coming days, ting days, the company expects to close a new five-year senior unsecured term loan facility of as much as $700 million, and an increase in its existing senior unsecured revolving credit facility of as much as $150 million. The company has received commitments from a syndicate of lenders and this new financing has been arranged by Bank of America Merrill Lynch, PNC Capital Markets and Regions Capital Markets.
David Mangum, Senior Executive Vice President, Chief Financial Officer, stated, "I am particularly pleased with our new financing arrangements which provide for capital flexibility to pursue our growth strategies. This will allow us to deploy substantial capital for further organic growth, future acquisitions and on-going share repurchases."
Share Repurchase Update
Through September 26, 2012, the company repurchased 280,000 shares at an average price of $42.12 per share for a total of $11.8 million. Under the current $150 million share repurchase authorization, $138.2 million remains available.
The company's full-year financial expectations have been updated to incorporate the anticipated closings of the two acquisitions and the new financing.
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. On a partial year basis, the company expects the APT transaction to add approximately 50 basis points of incremental cash operating margin to the total company for fiscal 2013. Annual expectations for fiscal 2013 diluted earnings per share on a cash basis remain unchanged at $3.59 to $3.66, 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 4% to 6%.
Annual fiscal 2013 GAAP diluted earnings per share has been updated to include purchase price amortization related to the APT acquisition; we now anticipate the range for annual GAAP diluted earnings per share to be $2.99 to $3.06 (See Schedule 8 for more detail).
Both cash and GAAP diluted earnings per share expectations exclude the impact of any potential future share repurchases and the full-year impact of all remediation costs.