The 2014 results reflect $41.4 million of pre-tax ($37.6 million after-tax, or $1.02 per share) asset impairment charges recorded in the fourth quarter, primarily related to our investment in Leaf and other Point-of-Sale (“POS”) assets and as more fully described below. For the fourth quarter of fiscal 2014, Heartland’s GAAP net loss was $19.8 million, or $0.55 per share. Adjusted Net Income and Adjusted Earnings per share from continuing operations are non-GAAP measures that are detailed later in this press release in the section “Reconciliation of Non-GAAP Financial Measures.”

Highlights for the fourth quarter of 2014 include:

• Record quarterly Net Revenue of $188.3 million, up 26.2% from the fourth quarter of 2013
• Small and Mid-Sized Enterprise (SME) Visa, MasterCard and Discover processing volume grew 10.1% from the fourth quarter of 2013, continuing the solid sequential quarterly improvements experienced since the beginning of 2014
• Record quarterly new margin installed of $21.4 million, up 11.7% from the fourth quarter of 2013
• Same store sales rose 3.9% and net volume attrition fell to 10.7% in the fourth quarter, the best performance for each metric in over 5 years
• Both GAAP and Adjusted financial results reflect $41.4 million pre-tax, ($37.6 million after-tax) or $1.02 per share, in asset impairment charges as a result of an analysis of the values ascribed to investments at Leaf and in Prosper, our internally-developed POS software, as well as our investment in TabbedOut, a mobile payments provider. The impairment charges are recorded against operating income, excepting only the $4.0 million write down of TabbedOut. All charges are non-cash
• The combination of share-based compensation and acquisition-related amortization reduced earnings by $7.5 million pre-tax, or approximately $0.13 per share, compared with $5.4 million pre-tax, or $0.09 per share in the fourth quarter of 2013

Robert O. Carr, Chairman and CEO, said, “We delivered another year of solid financial performance with accelerating growth across many of our most important key operating metrics, generating strong momentum on which we can build. Our performance reflects strong organic card processing volume and net revenue growth, as well as the continued contribution of strategic acquisitions and our non-card businesses. At the core, our success continues to reflect our fundamental market differentiators, offering small and mid-sized merchants transparent pricing, innovative products and uncompromised security, delivered by our trusted employee relationship managers - who generated record new margin installed for both the quarter and the year.”

In a separate release today, the acquisition of POS companies Dinerware and pcAmerica as well as the formation of Heartland Commerce was announced. These companies, along with existing POS businesses, Xpient Solutions, Liquor POS, Leaf, as well as other Heartland related solutions, constitute Heartland Commerce. Each of Dinerware and pcAmerica are in the process of completing the development of cloud-based POS systems that complement their well-established on-premise solutions. These cloud-based POS systems overlap with what is being developed by Leaf; consequently, Heartland decided that it will stop POS development efforts at Leaf, and write down related POS assets.

Mr. Carr continued: “The demand for robust cloud-based POS solutions is accelerating, and these acquisitions are helping us achieve our goal of becoming a leader in this segment of the market. New mobile, security, NFC and other innovations and requirements are increasing the complexity of the payments environment, while tablets and the cloud are driving down the cost and improving the functionality of point-of-sale solutions. The offering of a comprehensive integrated payments solution is a logical and natural evolution of the products and services we offer our merchants. As payments become more complex, merchants will increasingly turn to a trusted partner that can provide them with a solution that meets their unique needs. With a strong cloud-based POS infrastructure, we now have a leading platform to which we can quickly and efficiently add new applications either organically or through additional acquisitions, while further distinguishing Heartland as the leader in technology that provides the security and functionality increasingly demanded by the mounting complexity of the payments environment.”

FULL YEAR 2014 RESULTS:

For the full year of 2014, net revenue was $672.6 million, up 12.3% from $599.0 million in 2013, and Adjusted Net Income from continuing operations and related earnings was $50.2 million or $1.35 per share, compared to $88.1 million, or $2.32 per share, in the prior year. Fiscal 2014 GAAP net income from continuing operations was $33.9 million, or $0.91 per share. Both full year 2014 GAAP and Adjusted results reflect the $41.4 million of impairment charges recorded in the fourth quarter. Fiscal 2013 GAAP net income from continuing operations was $74.7 million or $1.96 per share. Full year 2014 share-based compensation expense and acquisition-related amortization expense reduced pre-tax earnings by $26.8 million, or $0.44 per share, compared to $22.0 million, or $0.36 per share, in 2013.

FULL YEAR 2015 GUIDANCE:

For full year 2015, we expect Net Revenue to grow 15% to 17% to be between approximately $775 million and $790 million, and adjusted EPS to be in the range of $2.75- $2.85. Guidance assumes after-tax share-based compensation and acquisition-related amortization expenses reduce earnings per share by $0.68 for the year.

BOARD DECLARES QUARTERLY DIVIDEND:

The Company also announced that the Board of Directors declared a quarterly dividend of $0.10 per common share, an increase of over 17% compared to the prior quarterly dividend rate, payable March 13, 2015 to shareholders of record on March 2, 2015.

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