Richardson M. Roberts, Chairman and Chief Executive Officer of PMT Services, Inc. (Nasdaq/NM: PMTS), today announced financial results for the fiscal year and fourth quarter ended July 31, 1997. Revenues for fiscal 1997 were $284,213,000, up 32.3% from $214,891,000 for fiscal 1996. Net income for the latest fiscal year increased 92.4% to $18,325,000 before nonrecurring items from $9,522,000 for fiscal 1996. There were nonrecurring after-tax consolidation and merger expenses of $1,926,000, or $0.05 per share, for fiscal 1997 and nonrecurring income of $704,000, or $0.02 per share, for fiscal 1996. With 18.6% greater weighted shares outstanding, earnings per share before nonrecurring items for fiscal 1997 increased 66.7% to $0.45 from $0.27 for the prior fiscal year. Consolidated results have been restated for certain pooling of interests acquisitions as if the acquired companies had always been a part of PMT.
Revenues increased 24.5% to $83,158,000 from $66,779,000 for the fourth quarter of fiscal 1996. Net income before nonrecurring items rose 64.5% to $5,826,000 from $3,542,000. There were nonrecurring merger expenses of $453,000, or $0.01 per share, for the fourth quarter of fiscal 1997 and nonrecurring income of $704,000, or $0.02 per share, for the fourth quarter of fiscal 1996. Earnings per share before nonrecurring items increased 55.6% to $0.14 for the latest quarter from $0.09 for the comparable period in fiscal 1996.
Mr. Roberts said, “The fourth quarter financial results capped an outstanding fiscal year for PMT. As the expansion of PMT’s merchant account portfolio has continued to drive revenue growth, better pricing and increased economies of scale have enabled the Company to improve profit margins. Income from operations for the fourth quarter increased to 10.3% of revenues from 7.9% for the fourth quarter of fiscal 1996, and net income before nonrecurring items increased to 7.0% of revenues from 5.3%.
“In addition to the substantial growth achieved in revenues and profits, PMT successfully implemented a strategy designed to position it for further significant growth. Primarily through the completion of twelve targeted acquisitions during the year, we diversified the Company’s product line with the addition of debit, leasing and check verification products, increased its ability to generate internal growth, strengthened its presence in the banking segment of the electronic processing industry and expanded the annualized charge volume of its merchant account portfolio.
“As a result, we enter fiscal 1998 with much broader capabilities than we had at the start of fiscal 1997. We intend to continue to focus on strengthening the Company’s internal growth prospects through the expansion of its field sales force, as well as the through the growth of its new products. We also remain committed to an aggressive acquisition strategy. We expect consolidation pressures to build further on the smaller providers of electronic transaction processing services, including both independent service organizations and commercial banks. PMT has amply demonstrated its ability to profit from industry consolidation through the acquisition and integration of attractive companies. We are confident we have the managerial skills and financial resources in place to continue to benefit from acquisitions in the future.
“In this regard, we are also very pleased to announce today the acquisition of Retail Systems Consulting, Inc.(“RSC”), an independent service organization with a merchant portfolio generating annualized charge volume of approximately $300 million. In addition to the merchant portfolio, this acquisition brings an experienced field sales force to the Company concentrated in Pennsylvania and Ohio, which are new markets for PMT. Enhancing the complementary nature of this acquisition, RSC has historically specialized in working with commercial bank portfolios similar to PMT’s commercial bank affiliate relationships. We therefore look forward to the smooth integration of RSC into PMT’s operations and to leveraging our investment in this high quality provider.”
The co-founders of RSC, Brian Shanahan and Richard Camardo, added, “We are excited to be joining forces with PMT, one of the clear leaders in our industry. We believe PMT’s scale and infrastructure will enable us to take a more aggressive approach to the opportunities for additional growth in our markets.”
Mr. Roberts concluded, “In summary, after a strong performance for fiscal 1997, we are confident of PMT’s prospects for fiscal 1998. The market for our core electronic processing services continues to grow at a double-digit rate. Through product diversification, we have created additional opportunities for growth beyond this core market. Even as we expand our mergers and acquisitions staff in response to ongoing consolidation opportunities, PMT is generating greater internal growth than ever before. We continue to benefit from the economies of scale our growth produces, and we expect to remain one of the leading providers of electronic transaction processing services to small businesses.”
Investors are cautioned that this release contains forward- looking statements, such as those relating to PMT’s ability to strengthen its internal growth prospects, to benefit from ongoing industry consolidation and to successfully integrate its acquisitions, that are based upon current expectations and involve a number of risks and uncertainties. Actual operations and results may differ materially from those expressed in the forward-looking statements made by the Company. The factors that could cause actual results to vary include PMT’s ability to retain and expand its field sales force; the ongoing performance of the field sales and telemarketing personnel; the actual production of new accounts by alliance partners; the Company’s ability to integrate acquisitions successfully with its processing systems and products and to account for acquisitions as poolings of interests; the availability of attractive acquisition targets; the availability of capital, attrition of merchants from acquired portfolios; and other trends or uncertainties as noted in PMT’s periodic filings with the SEC.
PMT Services, Inc. is an independent service organization which markets and services electronic credit card authorization and payment systems to small retail and professional businesses located throughout the United States. PMT’s account portfolio has grown through the internal development of accounts using telemarketing and a field sales force as well as through the purchase of account portfolios. PMT is one of the largest independent service organizations in the country.Details