TSYS Reports 17.2% Increase in Net Income for First Six Months of 2002
Company Confirms 20% Annual Earnings Growth
Columbus, Ga., July 16, 2002 - TSYS® today announced that its financial results were in line with the Company's forecast for the second quarter and first six months of 2002. The company reaffirms its 20% annual earnings growth estimate for 2002.
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Net income for the first six months of 2002 increased 17.2% to $56.2 million, up from $48.0 million in the same period last year. Basic earnings per share for the first half of 2002 increased to $0.29, up from $0.25 one year ago. Diluted earnings per share for the first half of 2002 increased to $0.28, up from $0.25 one year ago. Revenue for the first six months of 2002, was $460.8 million, an increase of 5.5%, compared with revenue of $436.6 million one year ago. Revenue for the first six months of 2002, excluding the amounts for reimbursable charges such as postage and courier charges, was $343.9 million, an increase of 9.4%, compared to one year ago.
Net income for the quarter ending June 30, 2002, increased 13.0% to $29.3 million, up from $26.0 million in the same period last year. Basic and diluted earnings per share for the second quarter increased to $0.15, up from $0.13 one year ago. Revenue for the second quarter was $237.0 million, an increase of 7.3%, compared with revenue of $220.9 million one year ago. Revenue for the second quarter of 2002, excluding the amounts for reimbursable charges, was $177.1 million, an increase of 9.8% compared to one year ago.
"We are pleased with our financial results for the second quarter and first six months of 2002. Consumer and commercial accounts on file grew by 16.4% and 14.4%, respectively, over June 2001. With this growth, TSYS improved its net profit margin before reimbursable items for the first six months to 16.4% from 15.3% a year ago," Ussery said.
"We are committed to expanding our processing presence internationally. During the quarter, we expanded our reach in Europe by signing a letter of intent to process about 500,000 card accounts in a three-year pilot program for Barclaycard, one of Europe's largest consumer credit card issuers. TSYS expects to begin processing these accounts in January 2003 upon the execution of a definitive agreement," Ussery said. "In addition, our international accounts on file grew by 25.4% over the second quarter last year. We are also expanding our international sales efforts by opening an office in Italy to support southern Europe."
TSYS announced the deployment of TSYS ProphITSM, a business process management solution for Charming Shoppes. Future development of TSYS ProphIT is expected to provide other financial institutions and retailers with a completely customized process management system that can integrate data from any processing system.
"We have the best technology, people and service in the industry to grow our core business in North America and abroad," Ussery said. "Our prospect list is the best that it has ever been. This is an exciting time at TSYS."
TSYS will host its quarterly conference call at 4:30 p.m. EDT, July 16, 2002. The conference call can be accessed at www.tsys.com by clicking on the designated icon within the "Highlights" section of the site. The replay will be available 30-45 minutes after the call.
About TSYS
TSYS (NYSE: TSS) (www.tsys.com) brings integrity and innovation to the world of electronic payment services as the integral link between buyers and sellers in this rapidly evolving universe. For more information, contact news@tsys.com.
Contacts:
James B. Lipham
Chief Financial Officer
706.649.2262
Leo S. Berard
Investor Relations
706.649.5220
This press release contains statements that constitute "forward-looking statements" within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934 as amended by the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, among others, statements regarding TSYS' expected growth in net income for the year 2002, expected conversions and processing of new accounts and the assumptions underlying such statements, including, with respect to TSYS' expected increase in net income; TSYS' expected internal growth rate for existing portfolios; an aggressive focus on expense control and productivity improvement; the successful implementation and market acceptance of new product offerings; expected increases in the number of accounts on file; expected increases in revenues; and expected increases in revenues attributable to international clients. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements. A number of important factors could cause actual results to differ materially from those contemplated by the forward-looking statements in this press release. Many of these factors are beyond TSYS' ability to control or predict. The factors include, but are not limited to, lower than anticipated internal growth rates for TSYS' existing customers; TSYS' inability to control expenses and increase market share; TSYS' inability to successfully bring new products to market, including, but not limited to, stored value and e-commerce products; the inability of TSYS to grow its business through acquisitions; adverse developments with respect to entering into contracts with new clients and retaining current clients; TSYS' inability to increase the revenues derived from international sources; the merger of TSYS clients with entities that are not TSYS clients or the sale of portfolios by TSYS clients to entities that are not TSYS clients; TSYS' inability to anticipate and respond to technological changes, particularly with respect to e-commerce; adverse developments with respect to the successful conversion of clients; the absence of significant changes in foreign exchange spreads between the United States and the countries TSYS transacts business in, to include Mexico, United Kingdom, Japan, Canada and the European Union; adverse developments with respect to the credit card industry in general; TSYS' inability to successfully manage any impact from slowing economic conditions or consumer spending; the occurrence of catastrophic events that would impact TSYS' or its major customers' operating facilities, communications systems and technology, or that has a material negative impact on current economic conditions or levels of consumer spending; revenues generated by sub-prime lending clients being less than anticipated; successfully managing the potential both for patent protection and patent liability in the context of rapidly developing legal framework for expansive software patent protection; and overall market conditions. Additional factors that could cause actual results to differ materially from those contemplated in this press release can be found in TSYS' filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K. We believe these forward-looking statements are reasonable; however, undue reliance should not be placed on any forward-looking statements, which are based on current expectations.