Heartland Payment Systems has revised its third quarter results after doubling the provision - to $73.3 million - for expenses related to the massive data breach it suffered last year.
Earlier this month the payment processor included a $35.6 million pre-tax provision for expenses related to the data breach in its Q3 results, contributing to a net loss of $13.6 million.
Heartland says that since then it has held settlement discussions that resulted in an increase in offers made to some claimants affected by the breach. As a result, it believes that SFAS No.5, "Accounting for Contingencies" requires it to increase the reserve.
The company has now increased the pre-tax provision to $73.3 million, or $1.22 per share taking the provision for the nine months to $105.3 million (pre-tax) or $1.74 per share.
This means that in its Form 10-Q, filed with the SEC yesterday, the company records a Gaap net loss for the quarter of $37.1 million, or 99 cents a share, and a Gaap net loss for the nine months of $42.2 million, or $1.12 per share.
Heartland reported in January that it had found malicious software in its processing system, potentially compromising the card data of millions of people. The malware, planted last year, compromised data that crossed its network with credit card numbers and expiration dates exposed.
The breach has also contributed to a legal spat with VeriFone that has seen both companies file lawsuits in recent weeks. The wrangling is rooted in Heartland's move to develop an end-to-end encryption system in the wake of the breach, with VeriFone claiming an associated terminal violates one of its patents.