Heartland Payment Systems Inc. (HPY, Financial) filed Quarterly Report for the period ended 2012-03-31.
Heartland Paymt has a market cap of $1.19 billion; its shares were traded at around $30.7 with a P/E ratio of 27.7 and P/S ratio of 0.6. The dividend yield of Heartland Paymt stocks is 0.8%.
Our general and administrative expenses increased $2.8 million, or 9.4%, from $30.0 million in the three months ended March 31, 2011 to $32.9 million in the three months ended March 31, 2012. General and administrative expenses in the three months ended March 31, 2012 included $1.1 million for our periodic sales and servicing organization summit held in March 2012. Excluding these summit expenses, our general and administrative expenses in 2012 increased $1.7 million, or 5.8%, primarily due to a $1.8 million increase in personnel costs, including $1.0 million for share-based compensation. General and administrative expenses as a percentage of total revenue for the three months ended March 31, 2012 was 7.0%, an increase from 6.4% for the three months ended March 31, 2011.
The amount of the up-front signing bonus paid for new SME bankcard, payroll and loyalty marketing accounts is based on the estimated gross margin for the first year of the merchant contract. The gross signing bonuses paid during the three months ended March 31, 2012 and 2011 were $8.2 million and $7.3 million, respectively, and for the full year ended December 31, 2011 were $30.5 million. The signing bonus paid, amount capitalized, and related amortization are adjusted at the end of the first year to reflect the actual gross margin generated by the merchant contract during that year. The net signing bonus adjustments made during the three months ended March 31, 2012 and 2011 were $(0.6) million and $(0.2) million, respectively. Negative signing bonus adjustments occur when the actual gross margin generated by the merchant contract during the first year is less than the estimated gross margin for that year, resulting in the overpayment of the up-front signing bonus and would be recovered from the relevant sales person. Positive signing bonus adjustments result from prior underpayments of up-front signing bonuses, and would be paid to the relevant salesperson. The amount of signing bonuses paid which remained subject to adjustment at March 31, 2012 was $31.2 million.
Costs of services. Costs of services decreased 2.1% from $423.0 million in the three months ended March 31, 2011 to $414.4 million in the three months ended March 31, 2012, due to the decrease in interchange expense resulting from the Durbin Amendment. Interchange expense decreased 7.1% from $320.8 million in the three months ended March 31, 2011 to $297.9 million in the three months ended March 31, 2012, and represented 63.3% of total revenues in the three months ended March 31, 2012 compared to 68.6% in the three months ended March 31, 2011.
General and administrative. General and administrative expenses increased $2.8 million, or 9.4%, from $30.0 million in the three months ended March 31, 2011 to $32.9 million in the three months ended March 31, 2012. General and administrative expenses in the three months ended March 31, 2012 included $1.1 million for our periodic sales and servicing organization summit held in March 2012. Excluding these summit expenses, our general and administrative expenses in 2012 increased $1.7 million, or 5.8%, primarily due to a $1.8 million increase in personnel costs, including a $1.0 million increase for share-based compensation. General and administrative expenses for the three months ended March 31, 2012 benefited from refined allocations of certain information technology related expenses, previously reported in general and administrative expense, now recorded in processing and servicing expense. General and administrative expenses as a percentage of total revenue for the three months ended March 31, 2012 was 7.0%, an increase from 6.4% for the three months ended March 31, 2011.
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Heartland Paymt has a market cap of $1.19 billion; its shares were traded at around $30.7 with a P/E ratio of 27.7 and P/S ratio of 0.6. The dividend yield of Heartland Paymt stocks is 0.8%.
Highlight of Business Operations:
Our financial results for the three months ended March 31, 2012, as compared to the three months ended March 31, 2011, benefited from a higher operating margin, reflecting 14.2% year-over-year growth in net revenue offset by lower increases of 7.9% in processing and servicing costs and 9.4% in general and administrative expenses. For the three months ended March 31, 2012, we recorded net income of $13.8 million, or $0.34 per share, compared to $7.8 million, or $0.20 per share, in the three months ended March 31, 2011. The following is a summary of our financial results for the three months ended March 31, 2012:Our general and administrative expenses increased $2.8 million, or 9.4%, from $30.0 million in the three months ended March 31, 2011 to $32.9 million in the three months ended March 31, 2012. General and administrative expenses in the three months ended March 31, 2012 included $1.1 million for our periodic sales and servicing organization summit held in March 2012. Excluding these summit expenses, our general and administrative expenses in 2012 increased $1.7 million, or 5.8%, primarily due to a $1.8 million increase in personnel costs, including $1.0 million for share-based compensation. General and administrative expenses as a percentage of total revenue for the three months ended March 31, 2012 was 7.0%, an increase from 6.4% for the three months ended March 31, 2011.
The amount of the up-front signing bonus paid for new SME bankcard, payroll and loyalty marketing accounts is based on the estimated gross margin for the first year of the merchant contract. The gross signing bonuses paid during the three months ended March 31, 2012 and 2011 were $8.2 million and $7.3 million, respectively, and for the full year ended December 31, 2011 were $30.5 million. The signing bonus paid, amount capitalized, and related amortization are adjusted at the end of the first year to reflect the actual gross margin generated by the merchant contract during that year. The net signing bonus adjustments made during the three months ended March 31, 2012 and 2011 were $(0.6) million and $(0.2) million, respectively. Negative signing bonus adjustments occur when the actual gross margin generated by the merchant contract during the first year is less than the estimated gross margin for that year, resulting in the overpayment of the up-front signing bonus and would be recovered from the relevant sales person. Positive signing bonus adjustments result from prior underpayments of up-front signing bonuses, and would be paid to the relevant salesperson. The amount of signing bonuses paid which remained subject to adjustment at March 31, 2012 was $31.2 million.
Costs of services. Costs of services decreased 2.1% from $423.0 million in the three months ended March 31, 2011 to $414.4 million in the three months ended March 31, 2012, due to the decrease in interchange expense resulting from the Durbin Amendment. Interchange expense decreased 7.1% from $320.8 million in the three months ended March 31, 2011 to $297.9 million in the three months ended March 31, 2012, and represented 63.3% of total revenues in the three months ended March 31, 2012 compared to 68.6% in the three months ended March 31, 2011.
General and administrative. General and administrative expenses increased $2.8 million, or 9.4%, from $30.0 million in the three months ended March 31, 2011 to $32.9 million in the three months ended March 31, 2012. General and administrative expenses in the three months ended March 31, 2012 included $1.1 million for our periodic sales and servicing organization summit held in March 2012. Excluding these summit expenses, our general and administrative expenses in 2012 increased $1.7 million, or 5.8%, primarily due to a $1.8 million increase in personnel costs, including a $1.0 million increase for share-based compensation. General and administrative expenses for the three months ended March 31, 2012 benefited from refined allocations of certain information technology related expenses, previously reported in general and administrative expense, now recorded in processing and servicing expense. General and administrative expenses as a percentage of total revenue for the three months ended March 31, 2012 was 7.0%, an increase from 6.4% for the three months ended March 31, 2011.
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