Adjusted Net Income and Adjusted Earnings per Share were $21.7 million and $0.53, respectively, for the quarter ended September 30, 2012, compared to Adjusted Net Income and Adjusted Earnings per Share of $13.5 million and $0.33, respectively, for the quarter ended September 30, 2011. Adjusted Net Income and Adjusted Earnings per Share are non-GAAP measures that are detailed later in this press release in the section "Reconciliation of Non-GAAP Financial Measures."

Highlights for the third quarter of 2012 include:

Small and Mid-Sized Enterprise (SME) quarterly transaction processing volume of $18.8 billion, up 5.8% from the third quarter of 2011, and a quarterly record
Quarterly Net Revenue of $143.4 million, up 17.3% from the third quarter of 2011, and a quarterly record
Operating Margin on Net Revenue of 23.5% compared to 17.7% for the same quarter in 2011 and the best quarterly operating margin in five years
Same store sales rose 1.8% and volume attrition was 12.9% in the third quarter
New margin installed of $14.4 million, up 11.2% from the third quarter of 2011
Share-based compensation reduced earnings by $3.5 million pre-tax, or approximately $0.05 per share, compared to $1.3 million pre-tax, or $0.02 per share in the third quarter of 2011

Robert Carr, Chairman and CEO, said, "We are pleased to report the most profitable quarter in the Company's history, with net revenue growing 17% and the operating margin expanding to 23.5% to drive a 56% increase in quarterly operating income. Returning over $275 million of Durbin Dollars to our merchants has significantly increased merchants' awareness of processing costs, which has enabled us to sustain double-digit new business growth and achieve record quarterly transaction processing volumes. The success of our productivity and efficiency initiatives has led to a significant improvement in our operating margin, which will exceed 20% this year, ahead of previous expectations. We continue to usetinue to use our strong cash flow to reward our shareholders, and have repurchased $100 million of our stock over the past 12 months. As electronic payments continue to evolve, our strong merchant relationships, leading technology and solid financial position provide us with the resources to create innovative solutions for our merchants and to increase value for our shareholders."

SME card processing volume for the three months ended September 30, 2012 increased 5.8% from the year-ago quarter to a record $18.8 billion as same store sales increased 1.8%, volume attrition was 12.9% and new margin installed grew 11.2%. Growth in both the card and non-card businesses contributed to a 17.3% increase in third quarter net revenue, with Heartland School Solutions revenue in the quarter up significantly, reflecting both the June 2012 acquisition of LunchByte Systems and the September 2011 acquisition of School-Link Technologies. The operating margin in the quarter was 23.5% of net revenue, the highest level in five years. The operating margin for the first nine months of 2012 was 21.3%, and we are on pace to exceed 20% for the year, a significant improvement from the full year 2011 operating margin of 16.2%. Higher share-based compensation and additional payroll and other expenses from the Heartland School Solutions acquisitions were the primary drivers of an 18.3% increase in general and administrative expenses in the quarter as compared to a year ago.

Mr. Carr continued, "With the industry's best sales organization, relationships with over 250,000 small and mid-sized merchants, and ownership of the 'last processing mile', we are in a strong position to capitalize on the growing need for innovative new payments solutions that help merchants achieve their business objectives. While opportunities abound, we are focused on developing solutions that leverage our strengths and provide meaningful, lasting benefits to our merchants. From mobile to rewards to new verticals and other emerging solutions, Heartland is uniquely positioned with the technology, resources, merchant-centered culture and management talent to capitalize on the growth opportunities in the market both today as well as in the future."

NINE MONTH RESULTS:

For the first nine months of 2012, GAAP net income was $50.9 million or $1.26 per share, compared to $32.7 million, or $0.82 per share for the first nine months of 2011. Net revenue for the first nine months of 2012 was $407.3 million, up 14.1% compared to the first nine months of 2011. Adjusted net income and earnings per share for the first nine months of fiscal 2012 were $57.7 million or $1.43 per share, compared to $36.3 million, or $0.91 per share in the first nine months of fiscal 2011. Year-to-date 2012, share-based compensation expense has reduced pre-tax earnings by $10.4 million or $0.16 per share, compared to $5.0 million, or $0.08 per share, a year ago.

RAISING FULL YEAR 2012 GUIDANCE:

The Company is raising its 2012 net revenue and earnings expectations. For full year 2012, we expect Net Revenue to be between $544 million and $546 million, and Adjusted EPS of $1.81 to $1.84, before deducting $0.21 per share of after-tax share-based compensation expense.

BOARD DECLARES QUARTERLY DIVIDEND; SHARE REPURCHASE PROGRAM UPDATE

The Company also announced that the Board of Directors declared a quarterly dividend of $0.06 per common share payable December 14, 2012 to shareholders of record on November 23, 2012. In addition, the Company has completed the $50 million Stock Purchase Program authorized by the Board of Directors in July 2012, repurchasing a total of 1.76 million shares at an average price of $28.40 per share.