National Processing Reports Third Quarter Financial Results
Thursday October 16, 7:30 am ET
biz.yahoo.com
LOUISVILLE, Ky., Oct. 16 /PRNewswire-FirstCall/ -- National Processing, Inc. (NYSE: NAP) today reported financial results for the third quarter and nine months ended September 30, 2003. Revenue for the third quarter of 2003 was $125.0 million, up 9% from 2002 third quarter revenue of $114.5 million. Net income for the third quarter of 2003 was $14.3 million, or $0.27 per diluted share, up 13% and 12%, respectively, from comparable 2002 net income of $12.7 million, or $0.24 per diluted share. For the nine months ended September 30, 2003, revenue was $344.6 million, up 2% from $337.1 million in 2002. Net income for the nine months ended September 30, 2003 was $33.9 million, or $0.65 per diluted share, both down 8%, from comparable 2002 net income of $36.9 million, or $0.70 per diluted share.
Net income for the nine months ended September 30, 2003 included after-tax restructuring charges of $0.8 million related to severance for technology personnel and a loss on the sale of 14 regional sales offices. Net income for the nine months ended September 30, 2002 included an after-tax restructuring charge of $2.4 million related to the closure of the Company's Mexican operations. Net income for the quarter and nine months ended September 30, 2002 also included after-tax expenses of $2.0 million related to a separation agreement with the former CEO.
Merchant Card Services transaction and dollar volume increased to record levels for the third quarter and year-to-date periods. Merchant Card Services transactions processed were 1.1 billion for the quarter and 3.1 billion year-to-date, representing increases of 11% and 9%, respectively, over comparable 2002 volume. Merchant Card Services dollar volume processed was $43.9 billion for the quarter and $125.6 billion year-to-date, representing increases of 5% and 1%, respectively, over comparable 2002 volumes. The dollar volume processed has trailed transaction growth primarily as a result of the Company's initiative to exit merchant processing for airlines, which have a large average ticket per transaction.
Chairman and CEO Jon L. Gorney commented, "We are pleased with the progress we have made this year. We are starting to see the benefits of some of our strategic initiatives. These successes, coupled with a modest rebound in consumer spending in the third quarter, resulted in improved financial results for the third quarter. At the same time, we continue to operate in a challenging environment. Our results for the year have been constrained by negative national merchant pricing trends, which was somewhat offset in the third quarter by favorable impacts of rate changes from the associations. We also are continuing to grow over the impact of our decision to exit merchant processing for the airlines.
"Our focus this year has been on pursuing growth in the regional market as well as the national market. In the regional market, we signed merchants at a record level in the third quarter. Some of our recent wins in the national and Tier-2 national markets include ShopKo, Sheetz, Luxottica Retail, Mikasa and Armstrong Garden Centers. We also recently announced the signing of Hardee's, which furthers our industry leading position in the Quick Service Restaurant market.
"Based on the stronger than expected volume in the third quarter, we are increasing our 2003 annual revenue estimate to a range of $455 to $475 million from our previous range of $435 to $455 million. We are maintaining our EPS guidance range for the full year 2003 at $0.90 to $0.95."
The Company's balance sheet remained strong. As of September 30, 2003, the Company had $254 million of cash and cash equivalents with no debt and total shareholders' equity of $495 million. Operating cash flow was $39.5 million and $103.1 million, respectively, for the quarter and nine months ended September 30, 2003. Capital expenditures were $1.6 million and $5.0 million for the quarter and nine months ended September 30, 2003, respectively. |
