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TSYS Reports First Quarter 2016 Adjusted EPS Grew 22.8%

Apr 26, 2016

Closes TransFirst Acquisition and Raises 2016 Guidance

COLUMBUS, Ga., April 26, 2016 — TSYS (NYSE: TSS) today reported results for the first quarter of 2016 and raised its guidance after the acquisition of TransFirst, which closed on April 1, 2016. TSYS' results for the first quarter do not include the results of TransFirst.

"Our financial performance for the first quarter was outstanding across all four of our segments. These results reflect exceptional execution by the TSYS team as we progress toward achieving our vision to become the leading global payment solutions provider and to deliver outstanding returns to our shareholders," said M. Troy Woods, chairman, president and chief executive officer of TSYS.

Highlights for the first quarter of 2016 include:

  • Adjusted EPS from continuing operations were $0.66, an increase of 22.8%. On a GAAP basis, basic EPS from continuing operations were $0.49, an increase of 17.3%. 
  • Income from continuing operations attributable to TSYS' shareholders was $90.6 million, an increase of 16.6%.
  • Adjusted EBITDA was $230.8 million, an increase of 19.3%.
  • Total revenues for the quarter were $739.4 million, an increase of 11.7%. Net revenue was $671.6 million, an increase of 12.7%. 
  • Adjusted operating margin was 27.7%, an increase of 178 basis points. GAAP operating margin was 20.5%.

"We are excited to include TransFirst in our revised guidance for 2016 that includes a net revenue range in excess of $3.0 billion and an adjusted earnings per share growth range of 13% to 16%. As a result of this transaction, TSYS is the 6th largest1 U.S. acquirer based on net revenue and supports more than 645,000 merchant outlets. With the added strength of TransFirst, TSYS is uniquely positioned as a top tier provider in issuer processing, merchant acquiring and prepaid program management delivering on our strategic goal of being a leader in all markets we serve," said Woods.

The following table provides TSYS' revised guidance for 2016 including TransFirst from April 1, 2016. Included is the introduction of a new adjusted revenue disclosure, net revenue, that better aligns our reporting with how the company's management measures performance internally. A reconciliation of net revenue, which is a non-GAAP measure, to GAAP revenues is included on page 10 of this press release.

2016 Revised Financial Outlook**

Range
(in millions, except per share amounts)
Percent Change
Total Revenues$4,182 to $4,26450% to 53%
Net Revenue$3,040 to $3,10222% to 24%
Adjusted EPS attributable to TSYS common shareholders from continuing operations*$2.78 to $2.8513% to 16%
*Average Basic Weighted Shares 183.6

**The revised guidance includes TransFirst's operating results for nine months of 2016, excludes one-time expenses incurred in connection with the TransFirst acquisition and assumes no significant movement in foreign exchange rates.

1 Pro forma ranking per First Annapolis Consulting and based on 2014 net revenue (gross revenue less interchange, assessments and card brand pass-throughs)

Conference Call
TSYS will host its quarterly conference call at 5:00 p.m. ET on Tuesday, April 26. The conference call can be accessed via simultaneous Internet broadcast at tsys.com by clicking on the link under "Webcasts" on the main homepage. The replay will be archived for 12 months and will be available approximately 30 minutes after the completion of the call. A slide presentation to accompany the call will be available by clicking on the link under "Webcasts" on the main homepage of tsys.com.

Non-GAAP Measures
This press release contains information prepared in conformity with GAAP as well as non-GAAP information. It is management’s intent to provide non-GAAP financial information to enhance understanding of its consolidated financial information as prepared in accordance with GAAP. This non-GAAP information should be considered by the reader in addition to, but not instead of, the financial statements prepared in accordance with GAAP. Each non-GAAP financial measure and the most directly comparable GAAP financial measure are presented so as not to imply that more emphasis should be placed on the non-GAAP measure. The non-GAAP financial information presented may be determined or calculated differently by other companies.

Additional information about non-GAAP financial measures, including, but not limited to, net revenue, adjusted EBITDA and adjusted EPS, and a reconciliation of those measures to the most directly comparable GAAP measures are included on pages 9 to 12 of this release.

About TSYS
TSYS® (NYSE: TSS) unlocks opportunities in payments for payment providers, businesses and consumers. Our headquarters are in Columbus, Georgia, USA, and we operate in more than 80 countries with local offices across the Americas, EMEA and Asia-Pacific.

We provide seamless, secure and innovative solutions across the payments spectrum — from issuer processing and merchant acquiring to prepaid program management — delivered through partnership and expertise. We succeed because we put people, and their needs, at the heart of every decision. It's an approach we call 'People-Centered Payments®'.

Our industry is changing every day — and we're leading the way towards the payments of tomorrow. We routinely post all important information on our website. For more, visit us at tsys.com.

Forward-Looking Statements
This press release contains "forward-looking statements" – that is, statements related to future, not past, events. Forward-looking statements often address our expected future business and financial performance and often contain words such as "expect," "anticipate," "intend," "believe," "should," "plan," "potential," "will," "could," and similar expressions. These forward-looking statements include, among others, statements regarding TSYS’ revised earnings guidance for 2016 total revenues, net revenue and adjusted EPS, and the assumptions underlying such statements. These statements are based on the current beliefs and expectations of TSYS’ management, are based on management’s assumptions and are subject to significant risks and uncertainties. Actual results may differ materially from those contemplated by the forward-looking statements. A number of important factors could cause actual results or events to differ materially from those contemplated by our forward-looking statements in this press release. Many of these factors are beyond TSYS' ability to control or predict. These factors include, but are not limited to, the material breach of security of any of TSYS' systems; TSYS’ ability to integrate acquisitions and achieve the anticipated growth opportunities and other benefits of the acquisitions, particularly the recently closed TransFirst acquisition; the effect of current domestic and worldwide economic conditions; risks associated with foreign operations, including adverse developments with respect to foreign currency exchange rates; expenses are incurred associated with the signing of a significant client; TSYS does not convert clients' portfolios as scheduled; the deconversion of a significant client; changes occur in laws, rules, regulations, credit card association rules, prepaid industry rules or other industry standards affecting TSYS and our clients that may result in costly new compliance burdens on TSYS and our clients and lead to a decrease in the volume and/or number of transactions processed or limit the types and amounts of fees that can be charged to customers; the costs and effects of litigation, investigations or similar matters or adverse facts and developments relating thereto; adverse developments with respect to the payment card industry in general, including a decline in the use of cards as a payment mechanism; and growth rates of TSYS' existing clients are lower than anticipated or attrition rates of existing clients are higher than anticipated. Additional risks and other factors that could cause actual results or events to differ materially from those contemplated in this release can be found in TSYS' filings with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-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. We do not assume any obligation to update any forward-looking statements as a result of new information, future developments or otherwise.

For financial details, click here.

Slide Presentation

Contacts:
Shawn Roberts
TSYS Investor Relations
+1.706.644.6081
shawnroberts@tsys.com