Total System Services announced net income and revenues for the nine months and quarter ended September 30, 2000.
Net income for the first nine months of 2000 increased 32.6% to $64.1 million, up from $48.3 million for the same period last year. Basic and diluted earnings per share for the nine months ended September 30, 2000, increased to $0.33, up from $0.25 for the first nine months of 1999. Revenues for the first nine months of 2000 were $445.3 million, an increase of 14.1% compared with revenues of $390.1 million for the first nine months of 1999.
Net income for the third quarter of 2000 increased 12.6% to $19.1 million, up from $16.9 million for the same period last year. Basic and diluted earnings per share for the third quarter of 2000 increased to $.10, up from $.09 for the third quarter of 1999. Revenues for the third quarter of 2000 were $149.0 million, an increase of 8.1%, compared with revenues of $137.8 million for the third quarter of 1999.
Chairman and CEO Richard W. Ussery said, “We are extremely pleased with the financial results for the first nine months of 2000. With the exceptional growth in the first nine months of 2000 and continued emphasis on expense control, we are well on our way to meeting our financial goal of a 25% increase in net income for 2000.”
Ussery continued, “During the third quarter of 2000, we announced:
* signing The Royal Bank of Scotland Group plc to a 10-year processing agreement for its 7 million consumer and commercial card accounts;
* signing Navy Federal Credit Union, the world’s largest credit union, to a multi-year agreement to provide processing solutions for its 645,000 consumer card account portfolio;
* acquisition of a majority interest in GP Network Corporation, a payments gateway for more than 100,000 merchants in Japan;
* opening of a sales office in Japan; and
* hiring of Roger Van Scoy, a 20-year veteran in the credit card and transaction processing industry, as Senior Director and Chief Operating Officer of TSYS Europe office, and the hiring of Hitoshi Kondo, a 17- year industry veteran, as President and Managing Director of TSYS Japan.
2001 Financial Outlook
TSYS expects an increase in net income for 2001 over 2000 of approximately 20%. This anticipated increase in net income is based in part upon the following assumptions:
* a 10-12% internal growth rate for existing Visa and MasterCard consumer card clients;
* an approximately 50% increase in international revenues on an annualized basis;
* an aggressive focus on expense control and productivity improvement;
* the successful implementation and market acceptance of new product offerings, including stored value and e-commerce; and
* increasing the total cardholder base to approximately 222 million accounts.
Although the quarterly projections for 2001 have not yet been finalized, TSYS does expect the second half of 2001 to be more robust than the first half of 2001. There is an expected increase in revenue in the second half of 2001 highlighted by the scheduled conversion of the Royal Bank of Scotland Group’s portfolio.
Preceding this increase in revenue in the second half of 2001, there are some events that will dilute the first half’s earnings.
* Infrastructure costs of global expansion. TSYS will incur personnel and equipment costs associated with establishing its international processing center in England as well as initiating a sales branch office in Japan.
* CITIBANK deconverted the UCS portfolio to its in-house processing system in August 2000. Due to this, on a comparative basis, revenues for the first half of 2001 will not include revenues from the UCS portfolio when compared to the first half of 2000.
Extended Financial Outlook
With the continued expansion of our businesses both domestically and internationally, market acceptance of our stored value products and e-commerce enabling systems, and aggressive expense management, we expect to increase our annual net income by 20-25% in 2002 and 2003.
TSYS provides global commerce solutions. With more than 186 million accounts on file, TSYS facilitates the payment exchange between buyers and sellers. TSYS and its family of companies offer a full range of business services from credit application to collections and bankruptcy services for credit, debit, commercial, stored-value and retail accounts. Based in Columbus, Ga., TSYS (http://www.totalsystem.com ) is an 80.8-percent-owned subsidiary of Synovus Financial Corp. (NYSE: SNV) ( ).
For additional info on TSYS’s 3Q results visit CardData ([www.carddata.com])