Raises 2015 Adjusted EPS Guidance Growth to
15-17%
TSYS (NYSE: TSS) today reported results for the second quarter
and year to date.
“For the second quarter in a row, we exceeded our expectations
that resulted in another outstanding quarter and year-to-date
performance. Organic revenue grew 13.7% year-to-date as we continue
to deliver exceptional performance across our key metrics,” said M.
Troy Woods, chairman, president and chief executive officer of
TSYS.
“As a result of our great performance during the first half of
the year, we are raising our revenues before reimbursables guidance
range to 10-12%, up from the previous range of 8-10%, and our
adjusted earnings per share (EPS) guidance range to 15-17%, up from
the previous range of 12-14%,” said Woods.
Highlights for the second quarter of 2015 include:
- Adjusted EPS from continuing operations
were $0.58, an increase of 29.0%. On a GAAP basis, basic EPS from
continuing operations were $0.45, an increase of 40.5%.
- Income from continuing operations
attributable to TSYS’ shareholders was $82.8 million, an increase
of 38.6%.
- Adjusted EBITDA was $206.5 million, an
increase of 20.9%.
- Total revenues for the quarter were
$692.7 million, an increase of 15.1%. Revenues before reimbursable
items were $622.1 million, an increase of 15.6%.
- Adjusted operating margin was 26.6%.
GAAP operating margin was 18.9%.
Highlights for the first six months of 2015 include:
- Adjusted EPS from continuing operations
were $1.11, an increase of 34.6%. On a GAAP basis, basic EPS from
continuing operations were $0.87, an increase of 49.6%.
- Income from continuing operations
attributable to TSYS’ shareholders was $160.6 million, an increase
of 47.2%.
- Adjusted EBITDA was $400.0 million, an
increase of 24.8%.
- Total revenues were $1.4 billion, an
increase of 13.4%. Revenues before reimbursable items were $1.2
billion, an increase of 13.7%.
- Adjusted operating margin was 26.3%.
GAAP operating margin was 18.7%.
“During the quarter, we purchased 700,000 shares of our stock
under our share repurchase program bringing our year to date total
to 2.2 million shares with a total spend of $83.5 million. Coupled
with our dividends of $36.9 million, we returned $120.4 million to
our shareholders, which was 74.2% of available year-to-date free
cash flow,” said Woods.
2015 Revised Financial Outlook Range
(in millions, except per
Percent
share amounts)
Change Total revenues $2,667 to $2,716
9% to 11% Revenues before reimbursable items $2,412
to $2,456 10% to 12%
Adjusted EPS attributable to TSYS common
shareholders from continuing operations*
$2.25
to
$2.29
15%
to
17%
* Average Basic Weighted Shares 184
*Note: The impact of any future share
repurchases is not included.
Conference Call
TSYS will host its quarterly conference call at 5:00 p.m. ET on
Tuesday, July 28. 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, 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
At TSYS® (NYSE: TSS), we believe payments should revolve around
people, not the other way around. We call this belief
People-Centered Payments®. By putting people at the center of every
decision we make, TSYS supports financial institutions, businesses
and governments in more than 80 countries. Through NetSpend®, A
TSYS Company, we empower consumers with the convenience, security,
and freedom to be self-banked. TSYS offers issuer services and
merchant payment acceptance for credit, debit, prepaid, healthcare
and business solutions.
TSYS’ headquarters are located in Columbus, Ga., U.S.A., with
local offices spread across the Americas, EMEA and Asia-Pacific.
TSYS is a member of The Civic 50 and has been named one of the 2015
World's Most Ethical Companies by Ethisphere magazine. TSYS
routinely posts all important information on its website. For more,
please visit us at www.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 2015 total revenues, revenues before reimbursable
items 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; 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 Six Months Ended June 30,
June 30, Percent Percent 2015 2014 Change 2015 2014 Change
Total revenues $ 692,652 602,036 15.1 % $ 1,354,808
1,194,883 13.4 % Cost of services 459,941 416,489 10.4
909,646 839,372 8.4 Selling, general and administrative expenses
102,109 86,784 17.7 192,064 176,051 9.1
Total expenses 562,050 503,273 11.7 1,101,710
1,015,423 8.5 Operating income 130,602 98,763 32.2
253,098 179,460 41.0 Nonoperating expenses (10,209 ) (10,385
) 1.7 (19,418 ) (20,198 ) 3.9
Income before income taxes, noncontrolling
interests and equity in income of equity investments
120,393 88,378 36.2 233,680 159,262 46.7 Income taxes 41,597
30,771 35.2 81,379 55,106 47.7
Income before noncontrolling interests and
equity in income of equity investments
78,796 57,607 36.8 152,301 104,156 46.2 Equity in income of equity
investments, net of tax 4,579 3,600 27.2 9,973
7,696 29.6 Income from continuing operations, net of tax
83,375 61,207 36.2 162,274 111,852 45.1
Gain from discontinued operations, net of
tax
- 50,133 nm - 51,113 nm Net income
83,375 111,340 (25.1 ) 162,274 162,965 (0.4 ) Net income
attributable to noncontrolling interests (536 ) (1,436 ) 62.7
(1,680 ) (3,759 ) 55.3
Net income attributable to TSYS common
shareholders
$ 82,839 109,904 (24.6 ) % $ 160,594 159,206
0.9 % Basic earnings per share(EPS):
Income from continuing operations to TSYS
common shareholders*
$ 0.45 0.32 40.5 % $ 0.87 0.58 49.6 %
Gain from discontinued operations to TSYS
common shareholders*
- 0.27 nm - 0.27 nm Basic EPS $ 0.45
0.59 (23.6 ) % $ 0.87 0.85 2.5 %
Diluted EPS:
Income from continuing operations to
TSYS common shareholders*
$ 0.45 0.32 41.1 % $ 0.87 0.58 50.5 %
Gain from discontinued operations to TSYS
common shareholders*
- 0.27 nm - 0.26 nm Diluted EPS $ 0.45
0.58 (23.3 ) % $ 0.87 0.84 3.1 %
Weighted average shares outstanding:
(includes participating securities)
Basic 183,829 186,373 184,153 187,058
Diluted 185,020 188,367 185,299 189,437
Dividends declared per share $ 0.10 0.10 $
0.20 0.20 Amounts attributable to TSYS common
shareholders: Income from continuing operations, net of tax $
82,839 59,771 38.6 % $ 160,594 109,092 47.2 % Gain from
discontinued operations, net of tax - 50,133 nm -
50,114 nm Net income $ 82,839 109,904
(24.6 ) % $ 160,594 159,206 0.9 %
Non-GAAP
measures:
Adjusted EPS from continuing operations $ 0.58 0.45
29.0 % $ 1.11 0.83 34.6 % Adjusted EBITDA $
206,537 170,894 20.9 % $ 399,991 320,489
24.8 % nm = not meaningful * EPS amounts may not
total due to rounding.
TSYS
Segment Breakdown (unaudited) (in thousands)
Three Months Ended
June 30, Six Months Ended June 30, Change Change 2015 2014
$ % 2015 2014 $ %
Revenues before reimbursable items: North America Services $
287,199 233,217 53,982 23.1 % $ 553,418 457,585 95,833 20.9 %
International Services 83,857 84,732 (875 ) (1.0 ) 157,587 161,505
(3,918 ) (2.4 ) Merchant Services 117,868 108,335 9,533 8.8 228,266
212,960 15,306 7.2 NetSpend 141,621 116,833 24,788 21.2 296,695
249,473 47,222 18.9 Intersegment revenues (8,461 ) (5,050 )
(3,411 ) (67.5 ) (18,098 ) (10,705 ) (7,393 )
(69.1 )
Revenues before reimbursable items from
external customers
$ 622,084 538,067 84,017 15.6 %
$ 1,217,868 1,070,818 147,050
13.7 % Total revenues: North America Services $ 333,844
273,324 60,520 22.1 % $ 643,077 535,502 107,575 20.1 %
International Services 89,618 90,466 (848 ) (0.9 ) 169,420 172,844
(3,424 ) (2.0 ) Merchant Services 137,472 128,017 9,455 7.4 266,576
250,707 15,869 6.3 NetSpend 141,621 116,833 24,788 21.2 296,695
249,473 47,222 18.9 Intersegment revenues (9,903 ) (6,604 )
(3,299 ) (50.0 ) (20,960 ) (13,643 ) (7,317 )
(53.6 ) Revenues from external customers $ 692,652
602,036 90,616 15.1 % $ 1,354,808
1,194,883 159,925 13.4 %
Depreciation and amortization: North America Services $ 24,468
20,928 3,540 16.9 % $ 47,532 41,204 6,328 15.4 % International
Services 8,628 9,761 (1,133 ) (11.6 ) 17,406 19,566 (2,160 ) (11.0
) Merchant Services 4,446 3,567 879 24.6 8,723 6,967 1,756 25.2
NetSpend 2,622 1,890 732 38.7
4,915 3,625 1,290 35.6 Segment
depreciation and amortization 40,164 36,146 4,018 11.1 78,576
71,362 7,214 10.1 Acquisition intangible amortization 22,852 24,282
(1,430 ) (5.9 ) 46,718 48,595 (1,877 ) (3.9 ) Corporate admin and
other 889 533 356 66.8 1,426
1,038 388 37.4 Total
depreciation and amortization $ 63,905 60,961
2,944 4.8 % $ 126,720 120,995
5,725 4.7 % Adjusted segment operating income:
North America Services $ 108,385 84,578 23,807 28.1 % $ 210,956
159,155 51,801 32.5 % International Services 13,353 11,743 1,610
13.7 20,336 16,298 4,038 24.8 Merchant Services 40,690 32,896 7,794
23.7 74,805 63,064 11,741 18.6 NetSpend 36,442 30,703
5,739 18.7 71,909 59,421
12,488 21.0 Total adjusted segment operating income
198,870 159,920 38,950 24.4 378,006 297,938 80,068 26.9 Acquisition
intangible amortization (22,852 ) (24,282 ) 1,430 5.9 (46,718 )
(48,595 ) 1,877 3.9 NetSpend M&A operating expenses - (1,182 )
1,182 nm - (2,435 ) 2,435 nm Share-based compensation (12,030 )
(9,988 ) (2,042 ) (20.4 ) (20,173 ) (17,599 ) (2,574 ) (14.6 )
Corporate admin and other (33,386 ) (25,705 ) (7,681
) (29.9 ) (58,017 ) (49,849 ) (8,168 ) (16.4 )
Operating income $ 130,602 98,763
31,839 32.2 % $ 253,098 179,460
73,638 41.0 % Other: Reimbursable items: North
America Services $ 46,645 40,107 6,538 16.3 % $ 89,659 77,917
11,742 15.1 % International Services 5,761 5,734 27 0.5 11,833
11,339 494 4.4 Merchant Services 19,604 19,682 (78 ) (0.4 ) 38,310
37,747 563 1.5 NetSpend - - - na - - - na Intersegment revenues
(1,442 ) (1,554 ) 112 7.2 (2,862 )
(2,938 ) 76 2.6 Reimbursable items $ 70,568
63,969 6,599 10.3 % $ 136,940
124,065 12,875 10.4 % TSYS
Condensed Balance Sheet (unaudited) (in thousands)
Jun 30, 2015 Dec 31, 2014
Assets Current
assets: Cash and cash equivalents $ 349,378 289,183 Accounts
receivable, net 314,678 283,203 Other current assets 123,689
118,167 Total current assets 787,745 690,553 Goodwill
1,547,089 1,547,397 Other intangible assets, net 366,215 404,107
Property, equipment and software, net 647,115 656,733 Other long
term assets 464,360 434,791 Total assets $ 3,812,524
3,733,581
Liabilities Current
liabilities: Accounts payable $ 57,358 48,793 Bonds, notes and
capital leases 43,791 50,911 Other current liabilities 230,075
196,809 Total current liabilities 331,224 296,513
Bonds, notes and capital leases, excluding current portion
1,387,514 1,405,106 Other long-term liabilities 291,249
309,826 Total liabilities 2,009,987 2,011,445
Redeemable noncontrolling interest 22,370 22,492
Equity Shareholders' equity 1,774,224
1,692,762 Noncontrolling interests in consolidated
subsidiaries 5,943 6,882 Total equity 1,780,167
1,699,644 Total liabilities and equity $ 3,812,524
3,733,581
TSYS Selected Cash Flow Highlights (unaudited) (in
thousands) Six Months Ended June 30, 2015 2014
Cash flows from
operating activities: Net income $ 162,274 162,965
Adjustments to reconcile net income to net
cash provided by operating activities:
Gain on disposal of subsidiaries - (85,310 ) Equity in income of
equity investments (9,973 ) (7,696 ) Dividends received from equity
investments 984 - Depreciation and amortization 126,720 122,393
Other non cash adjustments 29,537 31,996 Changes in operating
assets and liabilities: (24,249 ) 15,094
Net cash
provided by operating activities 285,293 239,442
Net
cash used in investing activities (97,512 ) (61,539 )
Net cash used in financing activities (126,244 ) (207,575 )
Cash and cash equivalents: Effect of exchange rate
changes on cash and cash equivalents (1,342 ) 2,399 Net
increase in cash and cash equivalents 60,195 (27,273 ) Cash and
cash equivalents at beginning of period 289,183 278,230
Cash and cash equivalents at end of period $ 349,378
250,957
Supplemental - Non GAAP: Net cash
provided by operating activities $ 285,293 239,442 Capital
expenditures (96,552 ) (105,776 ) Free cash flow 188,741 133,666
Principal payments on debt and capital leases (26,393 ) (34,467 )
Available free cash flow $ 162,348 99,199 TSYS
Supplemental Information (unaudited)
Other Accounts on File: Total Accounts on File
%
(in millions)
June 2015 June 2014 Change Consumer Credit 374.1
246.5 51.8 Retail 26.4 27.9 (5.6 ) Total Consumer
400.5 274.4 45.9 Commercial 44.0 40.4 8.7 Other 24.0
20.4 18.4 Subtotal 468.5 335.2 39.8 Prepaid/Stored Value 133.1
117.7 13.2 Government Services 77.1 65.6 17.4 Commercial Card
Single Use 72.7 54.2 34.2 Total AOF 751.4
572.7 31.2
Growth in Accounts
on File (in millions):
June 2014 to June 2013 to June 2015 June 2014 Beginning balance
572.7 488.7 Change in accounts on file due to: Internal growth of
existing clients 42.4 38.4 New clients 166.1 71.9 Purges/Sales
(29.3 ) (25.4 ) Deconversions (0.5 ) (0.9 )
Ending balance 751.4 572.7
Segment data: Three Months Ended June
30, Change 2015 2014 Inc(Dec) % North
America Segment: Transactions (in millions) 4,042.2 2,696.7
1,345.5 49.9 % International Segment: Transactions (in
millions) 613.9 558.1 55.8 10.0 % Merchant Segment:
Point-of-sale transactions (in millions) 1,089.4 1,045.1 44.3 4.2 %
Dollar sales volume (in millions) $ 12,314.8 $ 11,796.5 $ 518.3 4.4
% NetSpend Segment: Gross dollar volume (in millions) $
5,531.0 $ 4,628.0 $ 903.0 19.5 % Six Months Ended
June 30, Change 2015 2014 Inc(Dec) % North
America Segment: Accounts on file (AOF) (in millions) 677.5 510.3
167.2 32.8 % Transactions (in millions) 7,353.0 5,024.3 2,328.7
46.3 % International Segment: AOF (in millions) 73.9 62.3
11.6 18.5 % Transactions (in millions) 1,185.9 1,076.0 109.9 10.2 %
Merchant Segment: Point-of-sale transactions (in millions)
2,074.0 2,027.3 46.7 2.3 % Dollar sales volume (in millions) $
23,616.4 $ 22,576.3 $ 1,040.1 4.6 % NetSpend Segment: Gross
dollar volume (in millions) $ 13,191.7 $ 11,195.2 $ 1,996.5 17.8 %
Direct deposit 90-day active cards (in thousands) 1,879.8
1,600.7 279.1 17.4 % 90-day active cards (in thousands) 3,885.1
3,388.0 497.1 14.7 % % of 90-day active cards with direct deposit
48.4 % 47.2 %
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 second quarter
2015 financial results using the previous year’s foreign currency
exchange rates. On a full year constant currency basis, TSYS’ total
revenues grew 14.8% as compared to a reported GAAP increase of
13.4%. 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 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
June 30, Six Months Ended June 30, Percent Percent 2015 2014
Change 2015 2014 Change
Consolidated
Constant currency (1) $ 702,191 602,036 16.6 % $ 1,372,054
1,194,883 14.8 % Foreign currency (2) (9,539) -
(17,246) - Total revenues $ 692,652
602,036 15.1 % $ 1,354,808 1,194,883 13.4 %
Constant currency (1) $ 631,025 538,067 17.3 % $ 1,233,927
1,070,818 15.2 % Foreign currency (2) (8,941) -
(16,059) - Total revenues before reimbursable items $
622,084 538,067 15.6 % $ 1,217,868
1,070,818 13.7 % Constant currency (1) $ 131,105 98,763 32.7
% $ 253,443 179,460 41.2 % Foreign currency (2) (503)
- (345) - Operating income $ 130,602
98,763 32.2 % $ 253,098 179,460 41.0 %
International Services Constant currency (1) $ 99,076 90,466
9.5 % $ 186,456 172,844 7.9 % Foreign currency (2) (9,458)
- (17,036) - Total revenues $ 89,618
90,466 (0.9) % $ 169,420 172,844 (2.0) %
(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.
Revenues Before Reimbursable Items (unaudited) (in
thousands) Three Months Ended June 30, Six Months Ended June
30, Percent Percent 2015 2014 Change 2015 2014
Change Total revenues $ 692,652 602,036 15.1 % $ 1,354,808
1,194,883 13.4 % Reimbursable items 70,568 63,969
10.3 136,940 124,065 10.4 Revenues before
reimbursable items $ 622,084 538,067 15.6 % $
1,217,868 1,070,818 13.7 %
Reconciliation
of GAAP to Non-GAAP Adjusted Earnings per Share (unaudited) (in
thousands, except per share data)
Three Months Ended June 30, Six
Months Ended June 30, Percent Percent
2015 2014 Change 2015 2014 Change
Income from continuing operations
attributable to TSYS common shareholders
$ 82,839 59,771 38.6 % $ 160,594 109,092 47.2 % Adjust for amounts
attributable to TSYS common shareholders: Add: Acquisition
intangible amortization, net of taxes $ 15,083 15,799 (4.5 ) %
30,844 31,612 (2.4 ) Add: Share-based compensation, net of taxes
8,033 6,584 22.0 13,474 11,601 16.1 Add: NetSpend M&A expenses,
net of taxes* - 1,122 nm - 2,326
nm Adjusted earnings $ 105,955 83,276
27.2 % $ 204,912 154,631 32.5 %
Basic EPS - Income from continuing
operations attributable to TSYS common shareholders
As reported (GAAP) $ 0.45 0.32 40.5 % $ 0.87
0.58 49.6 % Adjust for amounts
attributable to TSYS common shareholders: Add: Acquisition
intangible amortization, net of taxes 0.08 0.08 (3.3 ) 0.17 0.17
(0.9 ) Add: Share-based compensation, net of taxes 0.04 0.04 23.7
0.07 0.06 18.0 Add: NetSpend M&A expenses, net of taxes* -
0.01 nm - 0.01 nm
Adjusted EPS ** $ 0.58 0.45 29.0 % $ 1.11
0.83 34.6 % Weighted average shares
outstanding 183,829 186,373 184,153
187,058 * 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 June 30, Six Months Ended
June 30, Percent Percent 2015 2014 Change 2015
2014 Change
Net income $ 83,375 111,340 (25.1 ) % $
162,274 162,965 (0.4 ) % Adjust for: Deduct: Income from
discontinued operations - (50,133 ) nm - (51,113 ) nm Deduct:
Equity in income of equity investments (4,579 ) (3,600 ) (27.2 )
(9,973 ) (7,696 ) (29.6 ) Add: Income taxes 41,597 30,771 35.2
81,379 55,106 47.7 Add: Nonoperating expense 10,209 10,385 (1.7 )
19,418 20,198 (3.9 ) Add: Depreciation and amortization 63,905
60,961 4.8 126,720 120,995
4.7
EBITDA $ 194,507 159,724 21.8 % $ 379,818 300,455
26.4 % Adjust for: Add: Share-based compensation 12,030 9,988 20.4
20,173 17,599 14.6 Add: NetSpend M&A operating expenses -
1,182 nm - 2,435 nm
Adjusted EBITDA $ 206,537 170,894 20.9
% $ 399,991 320,489 24.8 % nm = not
meaningful
Reconciliation of GAAP to Non-GAAP Segment
Operating Margin and Consolidated Adjusted Operating Margin
(unaudited) (in thousands)
Three Months Ended June 30, 2015 Three Months Ended
June 30, 2014 Adjusted Segment Revenues before Adjusted Adjusted
Segment Revenues before Adjusted Operating Income
Reimbursable Items Operating Margin Operating Income
Reimbursable Items Operating Margin North America Services $
108,385 287,199 37.74 % $ 84,578 233,217 36.27 % International
Services 13,353 83,857 15.92 11,743 84,732 13.86 Merchant Services
40,690 117,868 34.52 32,896 108,335 30.37 NetSpend 36,442 141,621
25.73 30,703 116,833 26.28 Intersegment - (8,461 ) - (5,050 )
Corporate admin and other (33,386 ) (25,705 )
Adjusted operating margin $ 165,484 622,084 26.60 % $
134,215 538,067 24.94 % Acquisition intangible amortization (22,852
) (24,282 ) NetSpend M&A operating expenses - (1,182 )
Share-based compensation (12,030 ) (9,988 )
Operating income and margin* $ 130,602 622,084 20.99 % $
98,763 538,067 18.36 % Reimbursable items 70,568
63,969 Operating margin (US GAAP) $
130,602 692,652 18.86 % $ 98,763
602,036 16.40 % Six Months Ended June 30, 2015
Six Months Ended June 30, 2014 Adjusted Segment Revenues before
Adjusted Adjusted Segment Revenues before Adjusted Operating Income
Reimbursable Items Operating Margin Operating Income
Reimbursable Items Operating Margin North America
Services $ 210,956 553,418 38.12 % $ 159,155 457,585 34.78 %
International Services 20,336 157,587 12.90 16,298 161,505 10.09
Merchant Services 74,805 228,266 32.77 63,064 212,960 29.61
NetSpend 71,909 296,695 24.24 59,421 249,473 23.82 Intersegment -
(18,098 ) - (10,705 ) Corporate admin and other (58,017 )
(49,849 ) Adjusted operating margin $ 319,989
1,217,868 26.27 % $ 248,089 1,070,818 23.17 % Acquisition
intangible amortization (46,718 ) (48,595 ) NetSpend M&A
operating expenses - (2,435 ) Share-based compensation (20,173 )
(17,599 ) Operating income and margin*
$ 253,098 1,217,868 20.78 % $ 179,460 1,070,818 16.76 %
Reimbursable items 136,940
124,065 Operating margin (US GAAP) $ 253,098
1,354,808 18.68 % $ 179,460 1,194,883
15.02 % * Operating margin on revenue before reimbursable
items
View source
version on businesswire.com: http://www.businesswire.com/news/home/20150728006735/en/
TSYS Investor RelationsShawn Roberts,
+1-706-644-6081shawnroberts@tsys.com
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