COLUMBUS, Ga.--(BUSINESS WIRE)--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 |
Percent | |||||||||||||
share amounts) |
Change | |||||||||||||
Total revenues | $4,182 | to | $4,264 | 50% | to | 53% | ||||||||
Net revenue | $3,040 | to | $3,102 | 22% | to | 24% | ||||||||
Adjusted EPS attributable to TSYS common shareholders from continuing operations* |
$2.78 |
to |
$2.85 |
13% |
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.
TSYS | ||||||||||||||
Financial Highlights | ||||||||||||||
(unaudited) | ||||||||||||||
(in thousands, except per share data) | ||||||||||||||
Three Months Ended | ||||||||||||||
March 31, | ||||||||||||||
Percent | ||||||||||||||
2016 | 2015 | Change | ||||||||||||
Total revenues | $ | 739,378 | 662,156 | 11.7 | % | |||||||||
Cost of services | 480,556 | 449,705 | 6.9 | |||||||||||
Selling, general and administrative expenses | 107,135 | 89,955 | 19.1 | |||||||||||
Total expenses | 587,691 | 539,660 | 8.9 | |||||||||||
Operating income | 151,687 | 122,496 | 23.8 | |||||||||||
Nonoperating expenses | (22,440 | ) | (9,209 | ) | nm | |||||||||
Income before income taxes, noncontrolling interests and equity in income of equity investments |
129,247 | 113,287 | 14.1 | |||||||||||
Income taxes | 43,429 | 39,782 | 9.2 | |||||||||||
Income before noncontrolling interests and equity in income of equity investments |
85,818 | 73,505 | 16.8 | |||||||||||
Equity in income of equity investments, net of tax | 6,590 | 5,394 | 22.2 | |||||||||||
Net income | 92,408 | 78,899 | 17.1 | |||||||||||
Net income attributable to noncontrolling interests | (1,780 | ) | (1,144 | ) | (55.6 | ) | ||||||||
Net income attributable to TSYS common shareholders | $ | 90,628 | 77,755 | 16.6 | % | |||||||||
Earnings per share (EPS): | ||||||||||||||
Basic EPS | $ | 0.49 | 0.42 | 17.3 | % | |||||||||
Diluted EPS | $ | 0.49 | 0.42 | 17.6 | % | |||||||||
Weighted average shares outstanding: | ||||||||||||||
(includes participating securities) | ||||||||||||||
Basic | 183,256 | 184,481 | ||||||||||||
Diluted | 183,886 | 185,563 | ||||||||||||
Dividends declared per share | $ | 0.10 | 0.10 | |||||||||||
Non-GAAP measures: |
||||||||||||||
Net revenue | $ | 671,644 | 595,784 | 12.7 | % | |||||||||
Adjusted EPS from continuing operations | $ | 0.66 | 0.54 | 22.8 | % | |||||||||
Adjusted EBITDA | $ | 230,829 | 193,454 | 19.3 | % | |||||||||
nm = not meaningful | ||||||||||||||
TSYS | |||||||||||||||
Segment Breakdown | |||||||||||||||
(unaudited) | |||||||||||||||
(in thousands) | |||||||||||||||
Three Months Ended March 31, | |||||||||||||||
Change | |||||||||||||||
2016 | 2015 | $ | % | ||||||||||||
Net revenue | |||||||||||||||
North America Services | $ | 303,641 | 266,219 | 37,422 | 14.1 | % | |||||||||
International Services | 75,354 | 73,730 | 1,624 | 2.2 | |||||||||||
Merchant Services | 120,612 | 110,398 | 10,214 | 9.3 | |||||||||||
NetSpend | 184,992 | 155,074 | 29,918 | 19.3 | |||||||||||
Intersegment revenues | (12,955 | ) | (9,637 | ) | (3,318 | ) | (34.4 | ) | |||||||
Net revenue from external customers | $ | 671,644 | 595,784 | 75,860 | 12.7 | % | |||||||||
Depreciation and amortization: | |||||||||||||||
North America Services | $ | 27,483 | 23,064 | 4,419 | 19.2 | % | |||||||||
International Services | 8,136 | 8,778 | (642 | ) | (7.3 | ) | |||||||||
Merchant Services | 5,050 | 4,277 | 773 | 18.1 | |||||||||||
NetSpend | 3,109 | 2,293 | 816 | 35.6 | |||||||||||
Segment depreciation and amortization | 43,778 | 38,412 | 5,366 | 14.0 | |||||||||||
Acquisition intangible amortization | 22,921 | 23,867 | (946 | ) | (4.0 | ) | |||||||||
Corporate admin and other | 884 | 536 | 348 | 64.9 | |||||||||||
Total depreciation and amortization | $ | 67,583 | 62,815 | 4,768 | 7.6 | % | |||||||||
Adjusted segment operating income: | |||||||||||||||
North America Services | $ | 124,788 | 102,570 | 22,218 | 21.7 | % | |||||||||
International Services | 10,289 | 6,983 | 3,306 | 47.3 | |||||||||||
Merchant Services | 38,357 | 34,115 | 4,242 | 12.4 | |||||||||||
NetSpend | 42,201 | 35,467 | 6,734 | 19.0 | |||||||||||
Total adjusted segment operating income | 215,635 | 179,135 | 36,500 | 20.4 | |||||||||||
Acquisition intangible amortization | (22,921 | ) | (23,867 | ) | 946 | 4.0 | |||||||||
TransFirst M&A operating expenses | (3,401 | ) | - | (3,401 | ) | nm | |||||||||
Share-based compensation | (8,158 | ) | (8,143 | ) | (15 | ) | (0.2 | ) | |||||||
Corporate admin and other | (29,468 | ) | (24,629 | ) | (4,839 | ) | (19.6 | ) | |||||||
Operating income | $ | 151,687 | 122,496 | 29,191 | 23.8 | % | |||||||||
nm = not meaningful | |||||||||||||||
TSYS | |||||||
Condensed Balance Sheet | |||||||
(unaudited) | |||||||
(in thousands) | |||||||
March 31, 2016 | December 31, 2015 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 1,932,111 | 389,328 | ||||
Accounts receivable, net | 349,271 | 314,705 | |||||
Other current assets | 145,052 | 154,199 | |||||
Total current assets | 2,426,434 | 858,232 | |||||
Goodwill | 1,545,631 | 1,545,424 | |||||
Other intangible assets, net | 309,372 | 328,320 | |||||
Property, equipment and software, net | 679,903 | 694,968 | |||||
Other long term assets | 462,593 | 450,951 | |||||
Total assets | $ | 5,423,933 | 3,877,895 | ||||
Liabilities | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 44,526 | 52,213 | ||||
Bonds, notes and capital leases | 21,647 | 53,546 | |||||
Other current liabilities | 217,524 | 233,173 | |||||
Total current liabilities | 283,697 | 338,932 | |||||
Bonds, notes and capital leases, excluding current portion | 2,887,247 | 1,377,541 | |||||
Other long-term liabilities | 306,362 | 289,330 | |||||
Total liabilities | 3,477,306 | 2,005,803 | |||||
Redeemable noncontrolling interest | 25,086 | 23,410 | |||||
Equity | |||||||
Shareholders' equity | 1,921,541 | 1,843,018 | |||||
Noncontrolling interests in consolidated subsidiaries | - | 5,664 | |||||
Total equity | 1,921,541 | 1,848,682 | |||||
Total liabilities and equity | $ | 5,423,933 | 3,877,895 |
Note: TSYS adopted Accounting Standards Update (ASU) 2015-03 "Interest - Imputation of Interest (Subtopic 835-30), Simplifying the Presentation of Debt Issuance Cost" on January 1, 2016. This ASU requires TSYS to present debt issuance costs in the balance sheet as a direct deduction from the carrying amount of the corresponding debt liability, consistent with debt discounts. All prior periods presented have been restated for this ASU. |
TSYS also adopted ASU 2015-17 "Income Taxes (Topic 740), Balance Sheet Classification of Deferred Taxes" on January 1, 2016. This ASU requires the classification of all deferred tax assets and liabilities as noncurrent on the balance sheet instead of separating deferred taxes into current and noncurrent amounts. All prior periods presented have been restated for this ASU. |
TSYS | ||||||||
Selected Cash Flow Highlights | ||||||||
(unaudited) | ||||||||
(in thousands) | ||||||||
Three Months Ended March 31, | ||||||||
2016 | 2015 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 92,408 | 78,899 | |||||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
Equity in income of equity investments | (6,590 | ) | (5,394 | ) | ||||
Dividends received from equity investments | - | - | ||||||
Depreciation and amortization | 67,583 | 62,815 | ||||||
Other noncash adjustments | 47,629 | 16,836 | ||||||
Changes in operating assets and liabilities | (55,202 | ) | 5,336 | |||||
Net cash provided by operating activities | 145,828 | 158,492 | ||||||
Net cash used in investing activities | (44,388 | ) | (41,714 | ) | ||||
Net cash provided by (used in) financing activities | 1,442,012 | (73,756 | ) | |||||
Cash and cash equivalents: | ||||||||
Effect of exchange rate changes on cash and cash equivalents | (669 | ) | (4,093 | ) | ||||
Net increase in cash and cash equivalents | 1,542,783 | 38,929 | ||||||
Cash and cash equivalents at beginning of period | 389,328 | 289,183 | ||||||
Cash and cash equivalents at end of period | $ | 1,932,111 | 328,112 | |||||
Supplemental - Non-GAAP: | ||||||||
Net cash provided by operating activities | $ | 145,828 | 158,492 | |||||
Capital expenditures | (44,388 | ) | (43,554 | ) | ||||
Free cash flow | 101,440 | 114,938 | ||||||
Principal payments on debt and capital leases* | (9,654 | ) | (15,086 | ) | ||||
Available free cash flow | $ | 91,786 | 99,852 | |||||
* Less accelerated principal payments | ||||||||
TSYS | |||||||||||
Supplemental Information | |||||||||||
(unaudited) | |||||||||||
Other | |||||||||||
Accounts on File (AOF): |
Total Accounts on File | ||||||||||
|
% | ||||||||||
(in millions) |
March 2016 | March 2015 | Change | ||||||||
Consumer | 414.8 | 392.8 | 5.6 | ||||||||
Commercial | 46.3 | 42.3 | 9.3 | ||||||||
Other | 27.7 | 22.7 | 22.5 | ||||||||
Traditional AOF | 488.8 | 457.8 | 6.8 | ||||||||
Prepaid*/Stored Value | 103.1 | 126.6 | (18.6 | ) | |||||||
Government Services | 82.7 | 74.5 | 11.1 | ||||||||
Commercial Card Single Use | 75.9 | 64.8 | 17.1 | ||||||||
Total AOF | 750.5 | 723.7 | 3.7 | ||||||||
* Prepaid does not include NetSpend accounts |
Growth in Accounts on File (in millions): |
||||||||||||||
March 2015 to | March 2014 to | |||||||||||||
March 2016 | March 2015 | |||||||||||||
Beginning balance | 723.7 | 556.2 | ||||||||||||
Change in accounts on file due to: | ||||||||||||||
Internal growth of existing clients | 52.3 | 39.8 | ||||||||||||
New clients | 43.1 | 172.5 | ||||||||||||
Purges/Sales | (24.3 | ) | (44.2 | ) | ||||||||||
Deconversions | (44.3 | ) | (0.6 | ) | ||||||||||
Ending balance | 750.5 | 723.7 |
Segment data: | |||||||||||||||||||
Three Months Ended March 31, | |||||||||||||||||||
Change | |||||||||||||||||||
2016 | 2015 | Inc(Dec) | % | ||||||||||||||||
North America Segment: | |||||||||||||||||||
AOF (in millions) | 669.7 | 653.2 | 16.5 | 2.5 | % | ||||||||||||||
Traditional AOF (in millions) | 423.3 | 396.3 | 27.0 | 6.8 | % | ||||||||||||||
Transactions (in millions) | 3,969.5 | 3,310.7 | 658.8 | 19.9 | % | ||||||||||||||
International Segment: | |||||||||||||||||||
AOF (in millions) | 80.8 | 70.5 | 10.3 | 14.7 | % | ||||||||||||||
Traditional AOF (in millions) | 65.5 | 61.5 | 4.0 | 6.6 | % | ||||||||||||||
Transactions (in millions) | 618.3 | 572.0 | 46.3 | 8.1 | % | ||||||||||||||
Merchant Segment: | |||||||||||||||||||
Point-of-sale transactions (in millions) | 1,091.0 | 984.6 | 106.4 | 10.8 | % | ||||||||||||||
Dollar sales volume (in millions) | $ | 11,783.4 | $ | 11,301.6 | $ | 481.8 | 4.3 | % | |||||||||||
NetSpend Segment: | |||||||||||||||||||
Gross dollar volume (in millions) | $ | 9,161.5 | $ | 7,660.7 | $ | 1,500.8 | 19.6 | % | |||||||||||
Direct deposit 90-day active cards (in thousands) | 2,789.2 | 2,403.5 | 385.7 | 16.0 | % | ||||||||||||||
90-day active cards (in thousands) | 4,881.6 | 4,193.0 | 688.6 | 16.4 | % | ||||||||||||||
% of 90-day active cards with direct deposit | 57.1 | % | 57.3 | % | |||||||||||||||
Reconciliation of GAAP to Non-GAAP Financial Measures |
Non-GAAP Measures |
The schedule below provides a reconciliation of revenues and operating results on a constant currency basis to reported revenues and operating income. This non-GAAP measure presents first quarter 2016 financial results using the previous year’s foreign currency exchange rates. On a full year constant currency basis, TSYS’ total revenues grew 12.5% as compared to a reported GAAP increase of 11.7%. |
The schedule below also provides a reconciliation of basic EPS, adjusted for the after-tax impact of acquisition intangible amortization, share-based compensation and merger and acquisition costs, to adjusted EPS. |
The schedule below provides a reconciliation of total revenues to net revenue. Net revenue is defined as total revenues less reimbursable items (such as postage), as well as, merchant acquiring interchange and assessment fees charged by the card associations or payment networks that are recorded by TSYS as expense. |
The tax rate used in the calculation of adjusted EPS for the quarter and year is equal to an estimate of our annual effective tax rate on GAAP income. This effective rate is estimated annually and may be adjusted during the year to take into account events or trends that materially impact the effective tax rate including, but not limited to, significant changes resulting from tax legislation, material changes in the mix of revenues and expenses by entity and other significant events. |
The schedule also provides a reconciliation of net income, adjusted for income from discontinued operations, equity in income of equity investments, income taxes, nonoperating expense, depreciation and amortization, share-based compensation, and merger and acquisition expenses, to adjusted EBITDA. |
TSYS believes that non-GAAP financial measures are important to enable investors to understand and evaluate its ongoing operating results. Accordingly, TSYS includes non-GAAP financial measures when reporting its financial results to shareholders and potential investors in order to provide them with an additional tool to evaluate TSYS’ ongoing business operations. TSYS believes that the non-GAAP financial measures are representative of comparative financial performance that reflects the economic substance of TSYS’ current and ongoing business operations. |
Although non-GAAP financial measures are often used to measure TSYS’ operating results and assess its financial performance, they are not necessarily comparable to similarly titled captions of other companies due to potential inconsistencies in the method of calculation. |
TSYS believes that its use of non-GAAP financial measures provides investors with the same key financial performance indicators that are utilized by management to assess TSYS’ operating results, evaluate the business and make operational decisions on a prospective, going-forward basis. Hence, management provides disclosure of non-GAAP financial measures to give shareholders and potential investors an opportunity to see TSYS as viewed by management, to assess TSYS with some of the same tools that management utilizes internally and to be able to compare such information with prior periods. TSYS believes that the presentation of GAAP financial measures alone would not provide its shareholders and potential investors with the ability to appropriately analyze its ongoing operational results, and therefore expected future results. TSYS therefore believes that inclusion of non-GAAP financial measures provides investors with additional information to help them better understand its financial statements just as management utilizes these non-GAAP financial measures to better understand the business, manage budgets and allocate resources. |
Reconciliation of GAAP to Non-GAAP | |||||||||||||
Constant Currency Comparison | |||||||||||||
(unaudited) | |||||||||||||
(in thousands) | |||||||||||||
Three Months Ended March 31, | |||||||||||||
Percent | |||||||||||||
2016 | 2015 | Change | |||||||||||
Consolidated | |||||||||||||
Constant currency (1) | $ | 744,974 | 662,156 | 12.5 | % | ||||||||
Foreign currency impact (2) | (5,596 | ) | - | ||||||||||
Total revenues | $ | 739,378 | 662,156 | 11.7 | % | ||||||||
Constant currency (1) | $ | 676,845 | 595,784 | 13.6 | % | ||||||||
Foreign currency impact (2) | (5,201 | ) | - | ||||||||||
Net revenue | $ | 671,644 | 595,784 | 12.7 | % | ||||||||
Constant currency (1) | $ | 152,781 | 122,496 | 24.7 | % | ||||||||
Foreign currency impact (2) | (1,094 | ) | - | ||||||||||
Operating income | $ | 151,687 | 122,496 | 23.8 | % | ||||||||
International Services | |||||||||||||
Constant currency (1) | $ | 86,611 | 79,802 | 8.5 | % | ||||||||
Foreign currency impact (2) | (5,538 | ) | - | ||||||||||
Total revenues | $ | 81,073 | 79,802 | 1.6 | % | ||||||||
(1) Reflects current period results on a non-GAAP basis as if foreign currency rates did not change from the comparable prior year period. | |||||||||||||
(2) Reflects the impact of calculated changes in foreign currency rates from the comparable period. | |||||||||||||
Net Revenue | |||||||||||||
(unaudited) | |||||||||||||
(in thousands) | |||||||||||||
Three Months Ended March 31, | |||||||||||||
Percent | |||||||||||||
2016 | 2015 | Change | |||||||||||
Total revenues | $ | 739,378 | 662,156 | 11.7 | % | ||||||||
Reimbursable items | 67,734 | 66,372 | 2.1 | ||||||||||
Interchange & assessments expense | - | - | - | ||||||||||
Net revenue | $ | 671,644 | 595,784 | 12.7 | % |
Reconciliation of GAAP to Non-GAAP | ||||||||||||||||
Adjusted Earnings per Share | ||||||||||||||||
(unaudited) | ||||||||||||||||
(in thousands, except per share data) | ||||||||||||||||
Three Months Ended March 31, | ||||||||||||||||
Percent | ||||||||||||||||
|
2016 |
2015 |
Change | |||||||||||||
Income from continuing operations attributable to TSYS common shareholders |
$ | 90,628 | 77,755 | 16.6 | % | |||||||||||
Adjust for amounts attributable to TSYS common shareholders: | ||||||||||||||||
Add: Acquisition intangible amortization, net of taxes | 15,021 | 15,761 | (4.7 | ) | ||||||||||||
Add: Share-based compensation, net of taxes | 5,406 | 5,441 | (0.6 | ) | ||||||||||||
Add: TransFirst M&A expenses, net of taxes* | 9,655 | - | nm | |||||||||||||
Adjusted earnings | $ | 120,710 | 98,957 | 22.0 | % | |||||||||||
|
||||||||||||||||
Basic EPS - Income from continuing operations attributable to TSYS common shareholders |
||||||||||||||||
As reported (GAAP) | $ | 0.49 | 0.42 | 17.3 | % | |||||||||||
Adjust for amounts attributable to TSYS common shareholders: | ||||||||||||||||
Add: Acquisition intangible amortization, net of taxes | 0.08 | 0.09 | (4.0 | ) | ||||||||||||
Add: Share-based compensation, net of taxes | 0.03 | 0.03 | (0.1 | ) | ||||||||||||
Add: TransFirst M&A expenses, net of taxes* | 0.05 | - | nm | |||||||||||||
Adjusted EPS ** | $ | 0.66 | 0.54 | 22.8 | % | |||||||||||
Weighted average shares outstanding | 183,256 | 184,481 | ||||||||||||||
* Certain merger and acquisition costs are nondeductible for income tax purposes | ||||||||||||||||
** Adjusted EPS amounts may not total due to rounding. | ||||||||||||||||
Adjusted EBITDA | ||||||||||||||||
(unaudited) | ||||||||||||||||
(in thousands) | ||||||||||||||||
Three Months Ended March 31, | ||||||||||||||||
Percent | ||||||||||||||||
2016 | 2015 | Change | ||||||||||||||
Net income | $ | 92,408 | 78,899 | 17.1 | % | |||||||||||
Adjust for: | ||||||||||||||||
Deduct: Equity in income of equity investments | (6,590 | ) | (5,394 | ) | (22.2 | ) | ||||||||||
Add: Income taxes | 43,429 | 39,782 | 9.2 | |||||||||||||
Add: Nonoperating expense | 22,440 | 9,209 | nm | |||||||||||||
Add: Depreciation and amortization | 67,583 | 62,815 | 7.6 | |||||||||||||
EBITDA | $ | 219,270 | 185,311 | 18.3 | % | |||||||||||
Adjust for: | ||||||||||||||||
Add: Share-based compensation | 8,158 | 8,143 | 0.2 | |||||||||||||
Add: TransFirst M&A operating expenses | 3,401 | - | nm | |||||||||||||
Adjusted EBITDA | $ | 230,829 | 193,454 | 19.3 | % | |||||||||||
nm = not meaningful |
Reconciliation of GAAP to Non-GAAP | |||||||||||||||||||||||
Segment Operating Margin and Consolidated Adjusted Operating Margin | |||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Three Months Ended March 31, 2016 | Three Months Ended March 31, 2015 | ||||||||||||||||||||||
Adjusted Segment | Adjusted | Adjusted Segment | Adjusted | ||||||||||||||||||||
Operating Income | Net Revenue | Operating Margin | Operating Income | Net Revenue | Operating Margin | ||||||||||||||||||
North America Services | $ | 124,788 | 303,641 | 41.10 | % | $ | 102,570 | 266,219 | 38.53 | % | |||||||||||||
International Services | 10,289 | 75,354 | 13.65 | 6,983 | 73,730 | 9.47 | |||||||||||||||||
Merchant Services | 38,357 | 120,612 | 31.80 | 34,115 | 110,398 | 30.90 | |||||||||||||||||
NetSpend | 42,201 | 184,992 | 22.81 | 35,467 | 155,074 | 22.87 | |||||||||||||||||
Intersegment | - | (12,955 | ) | - | (9,637 | ) | |||||||||||||||||
Corporate admin and other | (29,468 | ) | (24,629 | ) | |||||||||||||||||||
Adjusted operating margin | $ | 186,167 | 671,644 | 27.72 | % | $ | 154,506 | 595,784 | 25.93 | % | |||||||||||||
Acquisition intangible amortization | (22,921 | ) | (23,867 | ) | |||||||||||||||||||
TransFirst M&A operating expenses | (3,401 | ) | - | ||||||||||||||||||||
Share-based compensation | (8,158 | ) | (8,143 | ) | |||||||||||||||||||
Operating income and margin* | $ | 151,687 | 671,644 | 22.58 | % | $ | 122,496 | 595,784 | 20.56 | % | |||||||||||||
Reimbursable items | 67,734 | 66,372 | |||||||||||||||||||||
Operating income and margin (US GAAP) |
$ | 151,687 | 739,378 | 20.52 | % | $ | 122,496 | 662,156 | 18.50 | % | |||||||||||||
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* Operating margin on net revenue |