NOVA Corporation (Georgia) reported Thursday that it expects earnings for fiscal 2000 will range between $1.48 and $1.52 per fully diluted share, reflecting an adjusted annual growth rate of approximately 31% to 35% over estimated 1999 earnings. The current average of analyst’s estimates calls for the Company to earn $1.72 per share during 2000, according to First Call Corp., which tracks such forecasts. The Company also confirmed that it expects earnings for 1999 to be in line with the current average of analyst expectations, or $1.13 per share.
In December 1998, NOVA announced plans to accelerate the integration of the operations of PMT Services, Inc. into NOVA. “As of May 31, 1999, we had completed the conversion of over 53,000 of PMT’s merchants to NOVA’s operating platform — on pace with our 1999 goal of 85,000 PMT merchants — and we have substantially integrated PMT’s corporate operations,” said Edward Grzedzinski, Chairman and CEO of NOVA Corporation. Grzedzinski continued, “Once we complete our full conversion plan for 1999, we will enter 2000 with nearly 100,000 merchants to convert, including approximately 30,000 PMT merchants. The number of merchants to be converted next year is somewhat larger than originally anticipated due to several small portfolio acquisitions completed so far in 1999. As a result, we need to increase the original estimate for conversion costs in 2000 by several million dollars.” The Company also said it expects to incur slightly higher costs for operating expenses, taxes and service delivery expenses, all of which contribute to the lower earnings estimate. Grzedzinski commented further by saying, “NOVA’s dramatic growth from internally generated and acquired business has resulted in the need to invest in additional resources necessary to maintain the level of service our customers expect. Superior service is critical to NOVA’s ability to retain its position as the value-added provider of choice for small-to medium-sized merchants and sustain our historical growth rates.” Grzedzinski is pleased with progress thus far on the PMT consolidation and, in particular, with new sales results.
“The combined NOVA/PMT sales results have exceeded our early expectations by adding over 27,000 new merchants during the first quarter of 1999, with an even better run-rate so far during the second quarter,” he said.
NOVA TO ACQUIRE MAJORITY INTEREST IN ECONEX, LLC
NOVA also announced today that it will make an additional equity investment in Econex, LLC, increasing its ownership interest from 19.6% to 51%. “Our additional investment in Econex is further evidence of NOVA’s commitment to provide small businesses with the payment and information processing services necessary to succeed in today’s rapidly changing business environment,” said Grzedzinski.
Launched in April of this year, Econex, LLC, is a provider of fully integrated, e-commerce solutions for the small-to-medium sized business market, offering an array of services that enable businesses to build and maintain internet storefronts and to sell products and services in a secure, on-line environment. The innovative Econex service offering includes website creation, maintenance and hosting services, complete on-line payment solutions featuring shopping cart, virtual cash register, sales tax and shipping capabilities, on-line transaction processing and bill presentment capabilities. “We expect our majority interest in Econex to result in increased expenses during 2000, but we also expect it to be an excellent strategic investment for customers and shareholders alike,” Grzedzinski said. He added, “We plan to make the additional investment in Econex early in the first quarter of 2000, and we look forward to working with our partners, KeyCorp, N.A. and FirstEnergy Corporation, on this exciting endeavor.”
BOARD AUTHORIZES $250 MILLION SHARE REPURCHASE PROGRAM
The Company also announced that its Board of Directors has authorized a share repurchase program whereby NOVA may repurchase up to $250 million worth of its common shares. The share repurchase program authorizes the Company to make purchases from time-to-time in the open market or through privately negotiated transactions, subject to price, market considerations and applicable securities laws. No time limit was placed on the duration of the repurchase program. Repurchased common shares will be added to the Company’s treasury shares and may be used to meet requirements for benefit plans and other corporate purposes. As of March 31, 1999, NOVA had 72.9 million common shares outstanding.
“Given our opportunities in the marketplace, the strength of our sales and marketing efforts, and our solid financial position, we believe that NOVA shares represent a compelling value at current prices,” said Grzedzinski. He concluded his comments by saying, “The share repurchase program provides us with an opportunity to buy back our shares at exceptionally attractive prices. We are pleased that our strong cash position and available bank facilities will enable us to make share repurchases and, at the same time, continue to invest in our business and future growth.”
About NOVA Corporation
NOVA Corporation, based in Atlanta, Georgia, is one of the five largest U.S. providers of integrated point of sale transaction processing services, related software application products and value-added services, primarily to small- to medium-sized merchants. For further information about NOVA Corporation, please visit the Company’s Internet website at www.novacorp.net.
Cautionary Information Regarding Forward-looking Statements
This press contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 (the “Securities Act”), as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). When used in this report, the words “may,” “could,” “should,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “intend,” “plan” and similar expressions or statements regarding future periods are intended to identify forward-looking statements. All forward-looking statements are inherently uncertain as they are based on various expectations and assumptions concerning future events, which by their nature involve substantial risks and uncertainties beyond NOVA Corporation’s control. Forward-looking statements may also be made in NOVA’s other reports filed under the Exchange Act, press releases, and other documents; as well as by NOVA management in oral statements. NOVA undertakes no obligation to update or revise any forward-looking statements for events or circumstances after the date on which such statement is made. New factors emerge from time to time, and it is not possible for NOVA to predict all of such factors. Further, NOVA cannot assess the impact of each such factor on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. For a more complete discussion of these and other risk factors, please see the Company’s Annual Report on Form 10-K for the year ended December 31, 1998 filed with the Securities and Exchange Commission.Details