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Total System Services Inc. Reports Operating Results (10-Q)

November 05, 2012 | About:
10qk

10qk

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Total System Services Inc. (TSS) filed Quarterly Report for the period ended 2012-09-30.

Total System Services, Inc. has a market cap of $4.22 billion; its shares were traded at around $22.22 with a P/E ratio of 17.6 and P/S ratio of 2.3. The dividend yield of Total System Services, Inc. stocks is 1.8%. Total System Services, Inc. had an annual average earning growth of 7.1% over the past 10 years.

Highlight of Business Operations:

2012 includes a decrease of $2.4 million and $6.1 million, respectively, related to the effects of currency translation of foreign-based subsidiaries and branches. The Company has included reimbursements received for out-of-pocket expenses as revenues and expenses. The largest reimbursable expense item for which TSYS is reimbursed by clients is postage. The Companys reimbursable items are impacted with changes in postal rates and changes in the volumes of all mailing activities by its clients. Reimbursable items for the three and nine months ended September 30, 2012 were $62.0 million and $192.0 million, a decrease of $7.6 million or 10.9% and $11.8 million or 5.8%, respectively, compared to $69.5 million and $203.7 million for the same periods last year.

Excluding reimbursable items, revenues increased $15.9 million and $66.9 million, or 4.1% and 5.9%, during the three and nine months ended September 30, 2012 compared to the same periods in 2011. The 5.9% increase in revenues excluding reimbursable items for the nine months ended September 30, 2012, as compared to the same period in 2011, is the result of increases of 3.1% in revenues associated with new business, 5.8% in internal growth and 1.4% in acquisitions, partially offset by decreases of 3.9% associated with client portfolio deconversions and price reductions and 0.5% in currency translation.

The 2.6% decrease in total segment revenues for the three months ended September 30, 2012, as compared to the same period in 2011, is primarily the result of a decrease in reimbursable items of $3.7 million. Excluding reimbursable items, revenues decreased $2.6 million or 1.3%. The decrease in revenues excluding reimbursable items for the three months ended September 30, 2012, as compared to the same period in 2011, is the result of decreases of 5.1% associated with client portfolio deconversions, 3.5% of price reductions and 0.5% in intrasegment transactions, partially offset by increases of 2.4% in revenues associated with new business and 5.4% in internal growth. The 3.5% decrease related to price reductions includes a price reduction related to a tiered-pricing arrangement signed in the third quarter of 2012.

Net income attributable to TSYS common shareholders for the three months ended September 30, 2012 increased 3.7%, or $2.2 million, to $60.3 million, or basic and diluted earnings per share (EPS) of $0.32, compared to $58.1 million, or basic and diluted EPS of $0.30, for the same period in 2011. Net income attributable to TSYS common shareholders for the nine months ended September 30, 2012 increased 14.1%, or $22.7 million, to $183.4 million, or basic and diluted EPS of $0.97, compared to $160.7 million, or basic and diluted EPS of $0.83, for the same period in 2011.

As compared to 2011, TSYS expects its 2012 income from continuing operations to increase by 8%-10%, its EPS from continuing operations available to TSYS common shareholders to increase by 10%-12%, its revenues before reimbursable items to increase by 2%-5% and its total revenues to increase by 0%-2%, based on the following assumptions: (1) there will be no significant movements in London Interbank Offered Rate (LIBOR) and TSYS will not make any significant draws on the remaining balance of its revolving credit facility; (2) there will be no significant movement in foreign currency exchange rates related to TSYS business; (3) TSYS will not incur significant expenses associated with the conversion of new large clients or acquisitions, or any significant impairment of goodwill or other intangibles; (4) there will be no deconversions of large clients during the year; and (5) the economy will not worsen.

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