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

May 07, 2010 | About:
10qk

10qk

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Heartland Payment Systems Inc. (HPY) filed Quarterly Report for the period ended 2010-03-31.

Heartland Payment Systems Inc. has a market cap of $639.4 million; its shares were traded at around $16.98 with a P/E ratio of 22 and P/S ratio of 0.4. The dividend yield of Heartland Payment Systems Inc. stocks is 0.2%. Heartland Payment Systems Inc. had an annual average earning growth of 13.6% 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, Jim Simons of Renaissance Technologies LLC, Steven Cohen of SAC Capital Advisors.

Highlight of Business Operations:

During the three months ended March 31, 2010, we recovered from our insurance providers approximately $26.8 million of the costs we incurred for the Processing System Intrusion and expensed approximately $6.4 million for accruals, legal fees and costs we incurred for investigations and defending various claims and actions, for a net recovery of $20.4 million, or $0.32 per share. For the three months ended March 31, 2009, we recorded total expenses of $12.6 million, or $0.21 per share, associated with the Processing System Intrusion. Approximately $7.7 million of the $12.6 million total expenses related to accruals for assessments imposed by MasterCard and Visa in April 2009 against us and our sponsor banks. The remaining $4.9 million of the total expenses for the three months ended March 31, 2009 were for legal fees and costs incurred for investigations, defending various claims and actions, remedial actions and crisis management services.

Since our announcement of the Processing System Intrusion on January 20, 2009 and through March 31, 2010, we have expensed a total of $139.4 million, before reducing these charges by $30.7 million of total insurance recoveries. Approximately $26.6 million of these charges were for legal fees and costs we incurred for investigations, defending various claims and actions, remedial actions and crisis management services. The majority of these charges, or approximately $112.8 million, related to settlements of claims, settlement offers we made to certain claimants, or settlements we deemed likely to be agreed upon in the near term with certain claimants.

Our financial results for the three months ended March 31, 2010 continue to reflect the impacts of economic conditions, particularly on our SME merchant base, and the impacts of the Processing System Intrusion. Poor economic conditions have unfavorably impacted both new SME merchant installs and processing volume at existing SME merchants. For the three months ended March 31, 2010, we recorded net income of $14.2 million, or $0.36 per share, compared to a net loss of $2.5 million, or $0.07 per share, in the three months ended March 31, 2009.

In the three months ended March 31, 2010, we recognized net insurance recoveries of $20.4 million, or $0.32 per share, and for the three months ended March 31, 2009, we recorded total expenses of $12.6 million, or $0.21 per share, associated with the Processing System Intrusion. The following is a summary of our financial results for the three months ended March 31, 2010:

During the three months ended March 31, 2010, we recovered from our insurance providers approximately $26.8 million of the costs we incurred for the Processing System Intrusion, and expensed approximately $6.4 million for accruals, legal fees and costs we incurred for investigations, defending various claims and actions, remedial actions and crisis management services, for a net recovery of $20.4 million. For the three months ended March 31, 2009, we recorded total expenses of $12.6 million, or $0.21 per share, associated with the Processing System Intrusion. Approximately $7.7 million of this accrual related to accruals for assessments imposed by MasterCard and Visa in April 2009 against us and our sponsor banks. The remaining $4.9 million of the total expenses for the three months ended March 31, 2009 were for legal fees and costs we incurred for investigations, defending various claims and actions, remedial actions and crisis management services.

Since our announcement of the Processing System Intrusion on January 20, 2009 and through March 31, 2010, we have expensed a total of $139.4 million, before reducing these charges by $30.7 million of total insurance recoveries. Approximately $26.6 million of these charges were for legal fees and costs we incurred for investigations, defending various claims and actions, remedial actions and crisis management services. The majority of these charges, or approximately $112.8 million, related to settlements of claims, settlement offers we made to certain claimants, or settlements we deemed likely to be agreed upon in the near term with certain claimants.

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