National Processing Reports 27% Increase in Transaction Volume Over Prior Year
Core Revenue and Net Income Up 26% and 29% Over Prior Year
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LOUISVILLE, Ky., Oct. 17 /PRNewswire/ -- National Processing, Inc. (NYSE: NAP), today reported record net income for both the third quarter and nine months ended September 30, 2001. Net income for the third quarter was $15.0 million, or $0.29 per diluted share, up 16% and 13%, respectively, over comparable prior year amounts of $13.0 million, or $0.25 per diluted share. For the nine months ended September 30, 2001, net income excluding nonrecurring items was $40.6 million, or $0.78 per diluted share, up 20% and 17%, respectively, over comparable prior year amounts of $34.0 million, or $0.67 per diluted share. Merchant Card Services posted revenue increases of 32% and 26%, respectively, for the quarter and nine months ended September 30, 2001, as compared to the same periods in 2000. Merchant Card Services also reported 53% and 46% increases over prior year earnings before interest and taxes (EBIT) for the respective quarter and nine month periods ended September 30, 2001.
Net income for the nine months ended September 30, 2001 and 2000 included certain nonrecurring items related to restructuring and impairment charges, which are disclosed in the attached Financial Summary. Including these nonrecurring items, net income was $34.5 million, or $0.66 per diluted share, for the nine months ended September 30, 2001, versus $33.0 million, or $0.65 per diluted share, for the comparable 2000 period. Net income for the 2001 period included a nonrecurring after-tax charge of $6.2 million, or $0.12 per diluted share, for the loss associated with the Company's divestiture of its Business Process Outsourcing unit. Net income for the 2000 period included a nonrecurring after-tax charge of $1.0 million, or $0.02 per diluted share, for site consolidation initiatives in the Business Process Outsourcing unit.
Core(1) net income, which excludes divested operations and nonrecurring items, was $14.3 million for the third quarter, or $0.27 per diluted share, up 29% and 26%, respectively, over comparable core net income of $11.1 million, or $0.22 per diluted share, for the third quarter of 2000. For the nine months ended September 30, 2001, core net income was $38.3 million, or $0.74 per diluted share, up 30% and 27%, respectively, over core net income of $29.5 million, or $0.58 per diluted share, for 2000.
Third Quarter Highlights
* National Processing received the "Acquirer of the Year" award from Credit Card Management magazine. This award recognizes the organization that best exemplifies the highest level of operational and strategic excellence in our industry.
* Merchant Card Services transaction volume increased to record levels for the third quarter and year-to-date periods. Total merchant transactions processed were 897 million for the quarter and 2.5 billion year-to-date, representing 27% and 26% increases, respectively, over comparable prior year amounts. Organic transaction volume growth was 24% and 25% for the quarter and nine months ended September 30, 2001.
* Merchant Card Services dollar volume increased to record levels for the third quarter and year-to-date periods. Total dollar volume processed was $39.6 billion and $110.6 billion for the respective quarter and year-to-date periods, representing 27% and 26% increases over comparable
prior year amounts. Organic dollar volume growth was 21% and 23% for the quarter and nine months ended September 30, 2001.
* Revenue for Merchant Card Services increased to record levels of $105.6 million and $286.3 million for the quarter and nine months ended September 30, 2001, representing respective increases of 32% and 26% over the comparable prior year amounts. Organic revenue growth for Merchant Card Services was 17% for both the quarter and nine months ended September 30, 2001.
* Merchant Card Services EBIT increased to record levels of $21.0 million and $53.2 million for the quarter and nine months ended September 30, 2001, representing 53% and 46% increases, respectively, over comparable prior year results. For the 11th consecutive quarter, Merchant Card Services EBIT exceeded comparable prior year quarterly amounts by over 27%.
* Merchant Card Services began the integration process for ABN AMRO
Merchant Services (AAMS), an acquisition which closed on June 28, 2001.
The Company owns 70% of AAMS, which reported revenue of $8.5 million in
the quarter.
* The Company recently announced the signing of several new merchant
processing contracts including: Sonic Corp., the largest drive-in
restaurant chain in the U.S. and Romacorp, owner of Tony Roma's Famous
for Ribs restaurants. Account retention also remained strong with
several multi-year renewals including Pep Boys, the nation's leading
full-service automotive aftermarket retail service chain.
* The Company completed the divestiture of its Business Process
Outsourcing (BPO) business unit. The BPO business unit represented
approximately $60 million in annual revenue and was comprised of
healthcare claim, credit card application, and airline lift ticket
processing. This transaction included all of the Company's offshore
operations in Jamaica, the Dominican Republic and Barbados and
approximately 75 percent of the Company's Mexican operations.
Approximately 4,100 of NPC's 6,400 employees were associated with the
divested businesses.
``This was another excellent quarter for NPC,'' stated Thomas A. Wimsett, President and CEO. ``We are very proud of these results especially given the recent world events and a much more challenging economic environment. The organic transaction volume growth of 24% in our merchant card business proves that our fundamentals are strong and our business model is effective. We are clearly benefiting in the shift from paper to electronic payments and have continued to grow our processing volumes at more than double the industry growth rate.
``In addition, by closing on the BPO divestiture announced in July, we have now transformed National Processing into a company that is exclusively focused on payment processing.''
``We are extremely focused on maintaining our strong growth rates,'' stated Wimsett. ``Accordingly, we have aggressively expanded our distribution channels and we are making investments in both technology and customer service. NPC is already well known for our service leadership with large national merchants. By raising the bar for service quality in the regional segment, we intend to highlight this powerful competitive advantage.''
A conference call to discuss financial performance and business highlights will be held at 9:00 a.m. ET today by Thomas A. Wimsett, president and chief executive officer, and David E. Fountain, chief financial officer. The call will be open to the public with both media and individual investors invited to participate in a listen-only mode. The conference can be accessed by calling 888.423.3281 (domestic) and 612.332.1213 (international). Participants should plan to dial in approximately 15 minutes prior to the start of the call.
A replay of the live call will be available starting at 1:00 p.m. ET, October 17, 2001 through Midnight ET on October 19, 2001. The replay may be accessed by dialing 800.475.6701 (domestic) and 320.365.3844 (international) and entering access code 577723. |
