Global Payments Inc. (GPN, Financial) filed Quarterly Report for the period ended 2010-08-31.
Global Payments Inc. has a market cap of $3.38 billion; its shares were traded at around $42.34 with a P/E ratio of 16.4 and P/S ratio of 2.1. The dividend yield of Global Payments Inc. stocks is 0.2%. Global Payments Inc. had an annual average earning growth of 16.2% over the past 10 years. GuruFocus rated Global Payments Inc. the business predictability rank of 4-star.GPN is in the portfolios of Columbia Wanger of Columbia Wanger Asset Management, Paul Tudor Jones of The Tudor Group, Steven Cohen of SAC Capital Advisors, Jeremy Grantham of GMO LLC, Chuck Royce of Royce& Associates.
At August 31, 2010, we had cash and cash equivalents totaling $578.2 million. Of this amount, we consider $237.6 million to be available cash, which generally excludes settlement related and merchant reserve cash balances. Settlement related cash balances represent surplus funds that we hold on behalf of our member sponsors when the incoming amount from the card networks precedes the member sponsors funding obligation to the merchant. Settlement related cash balances are not restricted; however, these funds are generally paid out in satisfaction of settlement processing obligations the following business day. Merchant reserve cash balances represent funds collected from our merchants that serve as collateral to minimize contingent liabilities associated with any losses that may occur under the merchant agreement. At August 31, 2010, our cash and cash equivalents included $256.0 million related to Merchant reserves. While this cash is not restricted in its use, we believe that designating this cash to collateralize Merchant reserves strengthens our fiduciary standing with our member sponsors and is in accordance with the guidelines set by the card networks. See Cash and cash equivalents and Settlement processing assets and obligations under Note 1 in the notes to the unaudited consolidated financial statements for additional details.
Operating activities used net cash of $104.3 million during the three months ended August 31, 2010 compared to providing net cash of $696.5 million during the prior years comparable period. The decrease in cash flow from operating activities was primarily due to the change in net settlement processing assets and obligations of $798.8 million. Net settlement processing assets and obligations were unusually high at August 31, 2009 due to the timing of month end cut-off. See Settlement processing assets and obligations under Note 1 in the notes to the unaudited consolidated financial statements for additional details.
Net cash used in investing activities increased $15.7 million to $26.8 million for the three months ended August 31, 2010 from the prior years comparable period, primarily due to our capital expenditures of $24.8 million for investments in software and infrastructure during the three months ended August 31, 2010.
For the three months ended August 31, 2010, we used $61.8 million in cash for financing activities as we paid down debt of $49.5 million. See Long-Term Debt and Credit Facilities below for a more detailed discussion of our borrowing activities. Additionally, in the three months ended August 31, 2010 we paid $14.9 million in cash for repurchases, $1.9 million of which represents the cash settlement of purchases executed during the fiscal year ended May 31, 2010. We repurchased an additional 344,847 shares of our common stock using the remaining $13.0 million of our fiscal 2007 $100 million authorization for an average share price of $37.64.
We believe that our current level of cash and borrowing capacity under our lines of credit described below, together with future cash flows from operations, are sufficient to meet the needs of our existing operations and planned requirements for the foreseeable future. During fiscal year 2011, we expect capital expenditures to approximate $85 million. We anticipate spending approximately $55 million in ongoing capital expenditures primarily for our global terminal replacement program and infrastructure investments, $12 million in start-up expenses related to a new Global Service Center in Manila, Philippines which will support customer and operational functions and $17 million for a new data center.
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Global Payments Inc. has a market cap of $3.38 billion; its shares were traded at around $42.34 with a P/E ratio of 16.4 and P/S ratio of 2.1. The dividend yield of Global Payments Inc. stocks is 0.2%. Global Payments Inc. had an annual average earning growth of 16.2% over the past 10 years. GuruFocus rated Global Payments Inc. the business predictability rank of 4-star.GPN is in the portfolios of Columbia Wanger of Columbia Wanger Asset Management, Paul Tudor Jones of The Tudor Group, Steven Cohen of SAC Capital Advisors, Jeremy Grantham of GMO LLC, Chuck Royce of Royce& Associates.
Highlight of Business Operations:
On May 26, 2010, we completed the disposition of our DolEx and Europhil-branded money transfer businesses to an affiliate of Palladium Equity Partners, LLC for $85.0 million. We recognized an estimated pre-tax loss on disposal of $24.6 million. We also recognized $15.7 million of tax benefits associated with the disposition. As a result of our May 2010 disposition of the money transfer businesses, this segment has been accounted for as a discontinued operation. Amounts related to our discontinued operations in our prior fiscal years statements of income have been reclassified to conform with the presentation in the current fiscal year. Please see Note 3 Discontinued Operations in the notes to the unaudited consolidated financial statements for further information.At August 31, 2010, we had cash and cash equivalents totaling $578.2 million. Of this amount, we consider $237.6 million to be available cash, which generally excludes settlement related and merchant reserve cash balances. Settlement related cash balances represent surplus funds that we hold on behalf of our member sponsors when the incoming amount from the card networks precedes the member sponsors funding obligation to the merchant. Settlement related cash balances are not restricted; however, these funds are generally paid out in satisfaction of settlement processing obligations the following business day. Merchant reserve cash balances represent funds collected from our merchants that serve as collateral to minimize contingent liabilities associated with any losses that may occur under the merchant agreement. At August 31, 2010, our cash and cash equivalents included $256.0 million related to Merchant reserves. While this cash is not restricted in its use, we believe that designating this cash to collateralize Merchant reserves strengthens our fiduciary standing with our member sponsors and is in accordance with the guidelines set by the card networks. See Cash and cash equivalents and Settlement processing assets and obligations under Note 1 in the notes to the unaudited consolidated financial statements for additional details.
Operating activities used net cash of $104.3 million during the three months ended August 31, 2010 compared to providing net cash of $696.5 million during the prior years comparable period. The decrease in cash flow from operating activities was primarily due to the change in net settlement processing assets and obligations of $798.8 million. Net settlement processing assets and obligations were unusually high at August 31, 2009 due to the timing of month end cut-off. See Settlement processing assets and obligations under Note 1 in the notes to the unaudited consolidated financial statements for additional details.
Net cash used in investing activities increased $15.7 million to $26.8 million for the three months ended August 31, 2010 from the prior years comparable period, primarily due to our capital expenditures of $24.8 million for investments in software and infrastructure during the three months ended August 31, 2010.
For the three months ended August 31, 2010, we used $61.8 million in cash for financing activities as we paid down debt of $49.5 million. See Long-Term Debt and Credit Facilities below for a more detailed discussion of our borrowing activities. Additionally, in the three months ended August 31, 2010 we paid $14.9 million in cash for repurchases, $1.9 million of which represents the cash settlement of purchases executed during the fiscal year ended May 31, 2010. We repurchased an additional 344,847 shares of our common stock using the remaining $13.0 million of our fiscal 2007 $100 million authorization for an average share price of $37.64.
We believe that our current level of cash and borrowing capacity under our lines of credit described below, together with future cash flows from operations, are sufficient to meet the needs of our existing operations and planned requirements for the foreseeable future. During fiscal year 2011, we expect capital expenditures to approximate $85 million. We anticipate spending approximately $55 million in ongoing capital expenditures primarily for our global terminal replacement program and infrastructure investments, $12 million in start-up expenses related to a new Global Service Center in Manila, Philippines which will support customer and operational functions and $17 million for a new data center.
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