-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LUBfc5TY6x56HIXQNGkp2UP8ktwQBrcYUxkvOzJA+Mw3Vf6a/Y9h9WovSP0opbYW fLx7VKgIAdodvQwVCDvpjQ== 0000721683-02-000010.txt : 20020416 0000721683-02-000010.hdr.sgml : 20020416 ACCESSION NUMBER: 0000721683-02-000010 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20020415 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20020415 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TOTAL SYSTEM SERVICES INC CENTRAL INDEX KEY: 0000721683 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROCESSING & DATA PREPARATION [7374] IRS NUMBER: 581493818 STATE OF INCORPORATION: GA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-10254 FILM NUMBER: 02610176 BUSINESS ADDRESS: STREET 1: 1600 FIRST AVENUE STREET 2: P O BOX 1755 CITY: COLUMBUS STATE: GA ZIP: 31901 BUSINESS PHONE: 7066492267 MAIL ADDRESS: STREET 1: 1600 FIRST AVENUE CITY: COLUMBUS STATE: GA ZIP: 31901 8-K 1 filing8-k.txt 8-K FILING SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 April 15, 2002 --------------- (Earliest Event Reported) Total System Services, Inc. ----------------------------- (Exact Name of Registrant as Specified in its Charter) Georgia 1-10254 58-1493818 - -------------- ------------------ -------------- (State of (Commission File (IRS Employer Incorporation) Number) Identification Number) 1600 First Avenue, Columbus, Georgia 31901 ------------------------------------------ (Address of principal executive offices) (706) 649-2267 -------------- (Registrant's Telephone Number) (Former name or former address, if changed since last report) Item 5. Other Events. - ------ ------------- On April 15, 2002, Total System Services, Inc. ("Registrant") issued a press release with respect to its earnings for the quarter ended March 31, 2002. A copy of Registrant's press release regarding the announcement referenced above is attached hereto as Exhibit 99 and by this reference is hereby incorporated by reference into this Form 8-K and made a part hereof. The attached press release contains statements that constitute "forward-looking statements" within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934 as amended by the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, among others, statements regarding TSYS' expected growth in net income for the year 2002, expected growth in new business in Europe, belief with respect to long term opportunities for TSYS, belief with respect to decision making timelines of prospective clients, and the assumptions underlying such statements, including, with respect to TSYS' expected increase in net income; TSYS' expected internal growth rate for existing portfolios; an aggressive focus on expense control and productivity improvement; the successful implementation and market acceptance of new product offerings; expected increases in the number of accounts on file; expected increases in revenues; and expected increases in revenues attributable to international clients. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements. A number of important factors could cause actual results to differ materially from those contemplated by the forward-looking statements in the attached press release. Many of these factors are beyond TSYS' ability to control or predict. The factors include, but are not limited to, adverse developments with respect to TSYS' sub-prime clients; lower than anticipated internal growth rates for TSYS' existing customers; TSYS' inability to control expenses and increase market share; TSYS' inability to successfully bring new products to market, including, but not limited to, stored value products, e-commerce products and other processing services; the inability of TSYS to grow its business through acquisitions; adverse developments with respect to entering into contracts with new clients and retaining current clients; TSYS' inability to increase the revenues derived from international sources; the merger of TSYS clients with entities that are not TSYS clients or the sale of portfolios by TSYS clients to entities that are not TSYS clients; TSYS' inability to anticipate and respond to technological changes, particularly with respect to e-commerce; adverse developments with respect to the successful conversion of clients; the absence of significant changes in foreign exchange spreads between the United States and the countries TSYS transacts business in, to include Mexico, United Kingdom, Japan, Canada and the European Union; adverse developments with respect to the credit card industry in general; TSYS' inability to successfully manage any impact from slowing economic conditions or consumer spending; the occurrence of catastrophic events that would impact TSYS' or its major customers' operating facilities, communications systems and technology, or that has a material negative impact on current economic conditions or levels of consumer spending; revenues generated by sub-prime lending clients being less than anticipated; successfully managing the potential both for patent protection and patent liability in the context of rapidly developing legal framework for expansive software patent protection; and overall market conditions. Additional factors that could cause actual results to differ materially from those contemplated in the attached press release can be found in TSYS' filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K. We believe these forward-looking statements are reasonable; however, undue reliance should not be placed on any forward-looking statements, which are based on current expectations. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. - ------- ------------------------------------------------------------------ (a) Financial Statements - None. (b) Pro Forma Financial Information - None. (c) Exhibits 99 - Registrant's press release, April 15, 2002. 2 Signature Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, Registrant has caused this report to be signed on its behalf by the undersigned hereunto duly authorized. TOTAL SYSTEM SERVICES, INC. ("Registrant") Dated: April 15, 2002 By:/s/ Kathleen Moates -------------------- ----------------------------------- Kathleen Moates Senior Deputy General Counsel EX-99 3 lastrelease.txt PRESS RELEASE Exhibit 99 [TSYS (sm) Logo] News Release For Immediate Release Contacts: James B. Lipham Leo S. Berard Chief Financial Officer Investor Relations 706.649.2262 706.649.5220 TSYS Reports 22.3% Increase in Net Income for First Quarter 2002 International Revenue Up 88.1% Over 2001 Columbus, Ga., April 15, 2002 -- TSYS(R) today announced its financial results for the first quarter of 2002 were in line with the Company's forecast. Net income for the first quarter of 2002 increased 22.3% to $26.9 million, up from $22.0 million in the same period last year. Basic and diluted earnings per share for the first quarter increased to $0.14, up from $0.11 one year ago. Revenue for the quarter ending March 31, 2002, was $223.8 million, an increase of 3.8%, compared with revenue of $215.7 million one year ago. Revenue for the first quarter of 2002, excluding the amounts for reimbursable charges such as postage and courier charges, would have been $166.8 million, an increase of 8.9%, compared to a year ago. "We are pleased to report our financial results for the first quarter of 2002. For the quarter, our international revenue was up 88.1% over the first quarter in 2001. The growth in international revenue is attributable to our European expansion. As a result of our prior successes and the infrastructure we have in place, we believe we have the right business platform to further expand our European reach. On the domestic front, we converted 12 million accounts of the Charming Shoppes' retail card portfolio and continued to focus on expense control during the quarter," said Richard W. Ussery, chairman of the board and CEO of TSYS. "2002 is an extremely challenging year for TSYS. Our forecast for the year includes potential revenue from both prospective and existing clients, and also an intense focus on aggressive expense control. Against this backdrop, we remain cautiously optimistic that TSYS can achieve its goal of growing net income by 20% in 2002 over 2001. Adverse developments with respect to any of these matters could cause us to fall short of our goal of growing net income by 20% in 2002," Ussery said. "We continue to believe that the long-term opportunities for TSYS are tremendous and we have the best prospect list that we have ever had in the history of the company. Though the decision-making process of prospective clients has been extended in some cases in the wake of economic uncertainty, we believe that, in general, decision-making processes and timelines are beginning to return to normal. Even though we remain confident in signing these prospects, -- more -- TSYS Announces 22.3% Increase in First Quarter 2002 Earnings/Page 2of 6 any further delay will result in TSYS not being able to achieve some of its financial goals for 2003," Ussery said. "We have the best technology, people and service in the industry to grow our core business, on both the domestic and international fronts. We also have the opportunity to make acquisitions to diversify our revenue stream that will build the foundation for even greater future growth -- it is an exciting time at TSYS," Ussery said. As a result of the Financial Accounting Standards Board's (FASB) Staff Announcement Topic D-103, "Income Statement Characterization of Reimbursements Received for `Out-of-Pocket' Expenses Incurred," TSYS was required to include reimbursements received for out-of-pocket items such as postage and courier charges in its consolidated statements of income. Comparative financial statements for prior periods have also been reclassified to provide consistent presentation. Included in this press release is a supplemental schedule for the previous four quarters with the reclassification. After reviewing TSYS' segment disclosure, management has decided to revise its segment disclosure and realign the segments along geographic areas because TSYS regularly evaluates segments on a geographic basis in deciding how to allocate resources and in assessing performance. Included in this press release is a supplemental schedule for the previous four quarters with the new segment reclassification. TSYS will host a quarterly earnings conference call at 4:15 p.m. EDT, April 15, 2002. The conference call can be accessed at www.tsys.com by clicking on the listed item within the Highlights section of the home page. The replay will be archived for 90 days and will be available 30-45 minutes after the call. About TSYS TSYS (NYSE: "TSS") (www.tsys.com) brings integrity and innovation to the world of electronic payments. TSYS serves as the integral link between buyers and sellers in the rapidly evolving universe of electronic payments. With more than 229 million accounts on file, TSYS makes it possible for millions of consumers to use their credit, debit, stored value, commercial, chip and retail cards any time, anywhere through any medium or portal. TSYS and its family of companies offer a full range of acquiring and issuing services from accepting and settling electronic payments for goods and services to credit applications, bankruptcy and collections. Based in Columbus, Ga., TSYS serves companies in 23 countries, 14 currencies and four languages. TSYS maintains operations in Canada, Mexico, Japan and Europe and is an 81.1-percent-owned subsidiary of Synovus (NYSE: "SNV") (www.synovus.com ), No. 5 on FORTUNE magazine's list of "The 100 Best Companies To Work For" in 2002. For more information, contact news@tsys.com. This press release contains statements that constitute "forward-looking statements" within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934 as amended by the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, among others, statements regarding TSYS' expected growth in net income for the year 2002, expected growth in net income for the years 2001-2003, expected growth in new business in the United States, Europe and Asia, and the assumptions underlying such statements, including TSYS' expected increases in revenues, increases in revenues attributable to international clients, increases in net income and the expected increases in the number of accounts on file for 2001 through 2003. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those -- more -- TSYS Announces 22.3% Increase in First Quarter 2002 Earnings/Page 3 of 6 contemplated by such forward-looking statements. A number of important factors could cause actual results to differ materially from those contemplated by the forward-looking statements in this press release. Many of these factors are beyond TSYS' ability to control or predict. These factors include, but are not limited to, adverse developments with respect to TSYS' sub-prime clients; lower than anticipated internal growth rates for TSYS' existing customers; TSYS' inability to control expenses and increase market share; TSYS' inability to successfully bring new products and services to market, including, but not limited to, stored value products, e-commerce products and other processing services; the inability of TSYS to grow its business through acquisitions; adverse developments with respect to entering into contracts with new clients and retaining current clients; the merger of TSYS clients with entities that are not TSYS clients; TSYS' inability to anticipate and respond to technological changes, particularly with respect to e-commerce; adverse developments with respect to the successful conversion of clients; the absence of significant changes in foreign exchange spreads between the United States and the countries TSYS transacts business in, to include Mexico, United Kingdom, Japan, Canada and the European Union; adverse developments with respect to the credit card industry in general; TSYS' inability to successfully manage any impact from slowing economic conditions or consumer spending; the occurrence of catastrophic events that would impact TSYS' or its major customers' operating facilities, communications systems and technology, or that has a material negative impact on current economic conditions or levels of consumer spending; revenues generated by sub-prime lending clients being less than anticipated; successfully managing the potential both for patent protection and patent liability in the context of rapidly developing legal framework for expansive software patent protection; and overall market conditions. Additional factors that could cause actual results to differ materially from those contemplated in this press release can be found in TSYS' filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K. We believe these forward-looking statements are reasonable; however, undue reliance should not be placed on any forward-looking statements, which are based on current expectations. -- more -- TSYS Announces First Quarter 2002 Results Page 4 of 6 TSYS Financial Highlights (In thousands, except per share data)
------------------------------------------- Three months ended March 31, ------------------------------------------- Percentage 2002 2001 Change --------------- -------------- ---------- Revenues Electronic payment processing services $ 139,184 129,361 7.6 % Other services 27,647 23,811 16.1 --------------- -------------- Revenues before reimbursables 166,831 153,172 8.9 Reimbursable items 56,995 62,562 (8.9) --------------- -------------- Total revenues 223,826 215,734 3.8 --------------- -------------- Expenses Employment expenses 65,829 61,285 7.4 Occupancy & equipment expenses 43,632 41,057 6.4 Other expenses 22,088 21,590 2.3 --------------- -------------- Expenses before reimbursables 131,549 123,932 6.1 Reimbursable items 56,995 62,562 (8.9) --------------- -------------- Total expenses 188,544 186,494 1.1 Equity in Income of Joint Ventures 4,474 3,237 38.2 --------------- -------------- Operating Income 39,756 32,477 22.4 Other Income 194 1,013 (80.9) --------------- -------------- Income before Income Taxes 39,950 33,490 19.3 Income Taxes 13,036 11,475 13.6 --------------- -------------- Net Income $ 26,914 22,015 22.3 =============== ============== Basic Earnings Per Share $ 0.14 0.11 20.9 =============== ============== Diluted Earnings Per Share $ 0.14 0.11 20.9 =============== ============== Dividends Declared Per Share $ 0.015 0.015 =============== ============== Average Common Shares Outstanding 196,962,984 194,760,194 =============== ============== Average Common and Common Equivalent Shares Outstanding 197,723,177 195,534,087 =============== ============== Other (in millions) - --------------------------------------- Depreciation and amortization $ 13.8 12.8 8.2 =============== ==============
(more) TSYS Announces First Quarter 2002 Results Page 5 of 6 TSYS Financial Highlights Prior Year Restatement for Reimbursables (In thousands)
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr 2001 2001 2001 2001 2001 -------------------------------------------------------- ----------- Revenues Electronic payment processing services $129,361 139,966 141,564 146,514 557,405 Other services 23,811 21,368 19,590 22,066 86,835 -------------------------------------------------------- ----------- Revenues before reimbursables 153,172 161,334 161,154 168,580 644,240 Reimbursable items 62,562 59,560 54,993 55,451 232,566 -------------------------------------------------------- ----------- Total revenues 215,734 220,894 216,147 224,031 876,806 -------------------------------------------------------- ----------- Expenses Employment expenses 61,285 62,517 66,850 67,467 258,119 Occupancy & equipment expenses 41,057 43,862 41,346 43,270 169,535 Other expenses 21,590 19,970 19,478 20,215 81,253 -------------------------------------------------------- ----------- Expenses before reimbursables 123,932 126,349 127,674 130,952 508,907 Reimbursable items 62,562 59,560 54,993 55,451 232,566 -------------------------------------------------------- ----------- Total expenses 186,494 185,909 182,667 186,403 741,473 Operating Income 32,477 39,455 38,083 43,142 153,157 Net Income $ 22,015 25,956 25,458 29,473 102,902 ======================================================== ===========
(more) TSYS Announces First Quarter 2002 Results Page 6 of 6 TSYS Prior Year Restatement for Reimbursables and New Segments (In thousands)
First Quarter 2001 Second Quarter 2001 ------------------------------------------ ----------------------------------------- Domestic-based International-based Domestic-based International-based Transaction Transaction Transaction Transaction Processing Processing Consolidated Processing Processing Consolidated ------------------------------------------ ----------------------------------------- Total revenue $ 213,195 2,825 216,020 216,116 5,054 221,170 Intersegment revenue -- (286) (286) (2) (274) (276) ------------------------------------------ ----------------------------------------- Revenues from external customers $ 213,195 2,539 215,734 216,114 4,780 220,894 ========================================== ========================================= Equity in income of joint ventures $ 2,617 620 3,237 3,938 533 4,471 ========================================== ========================================= Segment operating income $ 38,429 (5,952) 32,477 45,535 (6,080) 39,455 ========================================== ========================================= Income tax expense $ 13,621 (2,146) 11,475 16,316 (2,331) 13,985 ========================================== ========================================= Net Income $ 25,797 (3,782) 22,015 29,828 (3,872) 25,956 ========================================== ========================================= Third Quarter 2001 Fourth Quarter 2001 ------------------------------------------ ----------------------------------------- Domestic-based International-based Domestic-based International-based Transaction Transaction Transaction Transaction Processing Processing Consolidated Processing Processing Consolidated ------------------------------------------ ----------------------------------------- Total revenue $ 204,074 12,309 216,383 210,213 14,099 224,312 Intersegment revenue (2) (234) (236) (3) (278) (281) ------------------------------------------ ----------------------------------------- Revenues from external customers $ 204,072 12,075 216,147 210,210 13,821 224,031 ========================================== ========================================= Equity in income of joint ventures $ 4,179 424 4,603 5,252 263 5,515 ========================================== ========================================= Segment operating income $ 40,209 (2,126) 38,083 46,981 (3,839) 43,142 ========================================== ========================================= Income tax expense $ 14,002 (845) 13,157 15,525 (1,251) 14,274 ========================================== ========================================= Net Income $ 26,783 (1,325) 25,458 31,842 (2,369) 29,473 ========================================== ========================================= 2001 First Quarter 2002 ------------------------------------------ ----------------------------------------- Domestic-based International-based Domestic-based International-based Transaction Transaction Transaction Transaction Processing Processing Consolidated Processing Processing Consolidated ------------------------------------------ ----------------------------------------- Total revenue $ 843,598 34,287 877,885 209,152 15,073 224,225 Intersegment revenue (7) (1,072) (1,079) (1) (398) (399) ------------------------------------------ ----------------------------------------- Revenues from external customers $ 843,591 33,215 876,806 209,151 14,675 223,826 ========================================== ========================================= Equity in income of joint ventures $ 15,986 1,840 17,826 4,226 248 4,474 ========================================== ========================================= Segment operating income $ 171,154 (17,997) 153,157 39,502 254 39,756 ========================================== ========================================= Income tax expense $ 59,464 (6,573) 52,891 12,930 106 13,036 ========================================== ========================================= Net Income $ 114,250 (11,348) 102,902 26,884 30 26,914 ========================================== =========================================
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