TSYS today announced that its net income for the second quarter increased 13% over second quarter 2005, and the first six months of 2006 exceeded the same period in 2005 by 11%.
"Our results for the second quarter of 2006 continued our momentum from the first quarter toward a record year of revenues and earnings. We continue our focus on delivering outstanding financial results, and we still expect our 2006 earnings growth will be at the high end of the 21-23% range," said Philip W. Tomlinson, chairman and chief executive officer of TSYS.
- Continued expansion of TSYS' global footprint with the acquisition of London-based Card Tech, Ltd., now known as TSYS Card Tech, for an aggregate consideration of approximately $58 million. The acquisition enables TSYS to offer more technology choices with the right combination of scale and functionality that are attractive to small, medium and large banks in global emerging markets. The acquisition of TSYS Card Tech expands the number of countries in which TSYS has a presence to 76.
- Reached a long-term agreement with Wachovia Corporation, the No. 4 bank-holding company, to provide core-processing and other related services in support of their re-entry into the consumer credit-card line of business.
- Reached agreements through TSYS Acquiring Solutions with Delta Payment Solutions and New England Bankcard Association to provide merchant processing services.
- Renewed a long term relationship through TSYS Acquiring Solutions with Heartland Payment Systems, one of the nation's largest providers of merchant acquiring services.
"Our acquisition of TSYS Card Tech significantly expands our global footprint and is an example of our strategy to diversify and expand our business. Along with this expansion, we continue to blend our industry-leading technology with our global workforce to provide our clients with unparalleled service. By pursuing opportunities both domestically and internationally to expand our client base and offer new services, we are enhancing our ability for future growth," said Tomlinson.
"We have also steadfastly maintained our focus on expense control by redeploying resources and managing headcount. As a result, we were able to keep our consolidated expenses flat for the second quarter," said Tomlinson.
Projected Outlook for 2006
TSYS expects to be at the high end of its previously announced earnings growth guidance of 21%-23% based on the following assumptions:
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- Total revenues will increase 6% - 8%
- Accounts on file at the end of 2006 will be approximately 395 million to 405 million
- Deconversion of Bank of America's consumer portfolio as scheduled in October 2006, with a one-time contract-termination payment of approximately $69 million and an acceleration of amortization of approximately $6 million in contract-acquisition costs
- Recognition of revenues and expenses associated with the Capital One agreement beginning in the fourth quarter of 2006