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Heartland Payment Systems Inc. Reports Operating Results (10-Q)

November 08, 2010 | About:
10qk

10qk

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Heartland Payment Systems Inc. (HPY) filed Quarterly Report for the period ended 2010-09-30.

Heartland Payment Systems Inc. has a market cap of $550.31 million; its shares were traded at around $14.45 with a P/E ratio of 23.31 and P/S ratio of 0.33. The dividend yield of Heartland Payment Systems Inc. stocks is 0.28%. Heartland Payment Systems Inc. had an annual average earning growth of 20.1% over the past 5 years.HPY is in the portfolios of David Nierenberg of D3 Family of Funds, John Buckingham of Al Frank Asset Management, Inc., Richard Pzena of Pzena Investment Management LLC.

Highlight of Business Operations:

Our total bankcard processing volume for the three months ended September 30, 2010 was $19.7 billion, a 6.4% increase from the $18.6 billion processed during the three months ended September 30, 2009. Our total bank card processing volume for the nine months ended September 30, 2010 was $56.1 billion, an 8.1% increase from the $51.9 billion processed during the nine months ended September 30, 2009. Our SME bankcard processing volume for the three and nine months ended September 30, 2010 included increases for American Express and Discover processing. Our Discover processing volume for the 2010 nine-month period also benefited from our purchase of an existing merchant portfolio from Discover during the third quarter of 2009. Bankcard processing volume for the three and nine months ended September 30, 2010 and 2009 was as follows:

Since its announcement of the Processing System Intrusion on January 20, 2009 and through September 30, 2010, we had expensed a total of $145.0 million, before reducing those charges by $30.7 million of total insurance recoveries. The majority of the total charges, or approximately $114.7 million, related to settlements of claims. Approximately $30.3 million of the total charges were for legal fees and costs we incurred for investigations, defending various claims and actions, remedial actions and crisis management services.

During the nine months ended September 30, 2010, we recovered from our insurance providers approximately $26.8 million of the costs we incurred for the Processing System Intrusion and expensed approximately $12.0 million for accruals, legal fees and costs we incurred for defending various claims and actions, resulting in a net recovery of $14.8 million, or $0.23 per share. For the three months ended September 30, 2010, we expensed a total of $0.7 million, or about $0.01 per share, respectively, associated with the Processing System Intrusion.

For the three and nine months ended September 30, 2009, we expensed a total of $73.3 million and $105.3 million, respectively, or about $1.22 and $1.74 per share, respectively, for settlement accruals, legal fees and costs we incurred for defending various claims and actions associated with the Processing System Intrusion.

Our financial results for the three months ended September 30, 2010 continue to reflect the impact of a slow economic recovery for our SME merchant base, and the costs of the Processing System Intrusion. Both the levels of new SME merchant installs and processing volume at existing SME merchants continue to be unfavorably impacted by the uncertain economy. For the three months ended September 30, 2010, we recorded net income of $7.5 million, or $0.19 per share, compared to a net loss of $37.1 million, or $0.99 per share, in the three months ended September 30, 2009.

In the three months ended September 30, 2010, we recorded total expenses of $0.7 million, or $0.01 per share, and for the three months ended September 30, 2009, we recorded total expenses of $73.3 million, or $1.22 per share, associated with the Processing System Intrusion (see Processing System Intrusion for more detail). The following is a summary of our financial results for the three months ended September 30, 2010:

Read the The complete Report

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