Tsys (NYSE: TSS) today reported second quarter total revenues of $412.0 million, a 1% increase over the first quarter of 2009.
These revenues included an unfavorable impact of $17.8 million from foreign currency exchange rates during the quarter when compared to the same period a year ago. On a non-GAAP basis, total revenues on a constant currency basis would have been $429.8 million.
Basic earnings per share (EPS) and EPS from continuing operations for the second quarter of 2009 were $0.27. Despite the headwinds of foreign currency exchange rates and upfront costs related to international expansion, TSYS' second quarter operating margins increased sequentially by 100 basis points and net income increased 5.2%.
||vs. Q2 2008
||vs. Q1 2009
||Down $17.6 million
||Up $3.1 million
|Revenues before Reimbursables
||Down $12.3 million
||Up $5.3 million
||Down $14.1 million
||Up $4.7 million
||Down $9.6 million
||Up $6.9 million
|Basic Earnings Per Share
||Down 5 cents
||Up 3 cents
"While the economic environment continues to be challenging, we saw improvements in our financial results as evidenced by the improvement in our sequential total revenues, operating income and net income. In addition, our International Services segment's operating margin increased to 12.6% from 8.5% on a sequential quarter basis. We continue to be committed to growing our revenues by signing and converting new clients and managing our costs," said Philip W. Tomlinson, chairman of the board and chief executive officer of TSYS.
"With the conversion of Deutsche Bank in Germany now complete, we continue to expand our global presence and will add more business when the conversion of Carrefour in Brazil is completed in early 2010. These wins in the international marketplace are a key component of our growth strategy, and we expect to continue adding new clients," said Tomlinson.
"Our pursuit of acquisition opportunities continues. Our cash increased $133.1 million since year-end, and our operations continue to generate significant amounts of cash. We plan on deploying this cash and our debt capacity as we actively pursue acquisitions that fit our corporate strategy," said Tomlinson.
TSYS is negotiating with a potential buyer for the sale of TSYS Debt Management (TDM), a subsidiary of TSYS, which is involved in the legal collections management and bankruptcy processing business. During the second quarter, TDM recognized a one-time gain related to a partial recovery of a previously resolved client issue, which resulted in a net gain of $771,000 in discontinued operations.
TSYS reaffirms its previously released guidance for 2009 of declines in revenues of 5% to 3% and net income of 13% to 11%.