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
Date of Report (Date of Earliest Event Reported): April 21, 2004
CERTEGY INC.
(Exact name of Registrant as Specified in its Charter)
| Georgia | 001-16427 | 58-2606325 | ||
| (State or other Jurisdiction of Incorporation or Organization) |
(Commission File Number) |
(IRS Employer Identification No.) |
| 11720 Amber Park Drive Suite 600 Alpharetta, Georgia |
30004 | |
| (Address of principal executive offices) | (Zip code) |
Registrant’s telephone number, including area code: (678) 867-8000
Not Applicable
(Former name or former address, if changed since last report)
| ITEM 7. | FINANCIAL STATEMENTS, PRO FORMA INFORMATION AND EXHIBITS |
| (a) | Financial Statements of Businesses Acquired: |
None.
| (b) | Pro Forma Financial Information: |
None.
| (c) | Exhibits: |
| Exhibit No. |
Description | |
| 99.1 | Certegy Inc. press release dated April 21, 2004, announcing the Company’s financial results for the first quarter of 2004 (furnished pursuant to Item 12 of Form 8-K). |
| ITEM 12. | Results of Operations and Financial Condition |
On April 21, 2004, Certegy Inc. (“Certegy”) issued a press release to announce its financial results for the first quarter of 2004. A copy of the press release is attached as Exhibit 99.1.
This press release presents certain operating income, net income, and earnings per share measures that exclude charges for contract termination and other charges. The press release reconciles these measures to the most directly comparable operating income, net income, and earnings per share measures calculated and presented in accordance with GAAP.
Management believes that presentation of these measures excluding the described charges is useful because it allows investors and management to evaluate and compare Certegy’s core operating results from ongoing operations from period to period in a more meaningful and consistent manner than relying exclusively on GAAP financial measures. Non-GAAP financial measures however should not be considered in isolation or as an alternative to financial measures calculated and presented in accordance with GAAP.
As used herein, “GAAP” refers to accounting principles generally accepted in the United States.
2
The information in the Report, including the Exhibit attached hereto, is furnished solely pursuant to Item 12 of this Form 8-K. Consequently, it is not deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities of that section. It may only be incorporated by reference in another filing under the Exchange Act or Securities Act of 1933 if such subsequent filing specifically references this Form 8-K.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| CERTEGY INC. | ||||||||
| By: | /s/ Michael T. Vollkommer | |||||||
| Date: April 21, 2004 |
Michael T. Vollkommer Corporate Vice President and Chief Financial Officer | |||||||
3
Exhibit 99.1
| Press Release | Certegy Inc. 11720 Amber Park Drive Suite 600 Alpharetta, Georgia 30004 | |||
| Date: April 21, 2004 | Phone: 678-867-8000 Fax: 678-867-8100 | |||
| Contact: Mary Waggoner Certegy Inc. VP–Investor and Public Relations 678-867-8004 | ||||
FOR IMMEDIATE RELEASE
CERTEGY REPORTS FIRST QUARTER 2004 DILUTED EPS OF $0.32 ON REVENUE OF $263.4 MILLION
Alpharetta, GA, April 21, 2004 – Certegy Inc. (NYSE:CEY) today reported first quarter 2004 diluted earnings per share of $0.32 on revenue of $263.4 million and operating income of $35.5 million.
FIRST QUARTER FINANCIAL HIGHLIGHTS
Highlights of the 2004 first quarter results, as compared to the prior year quarter (the 2003 quarter included $12.6 million, or $0.12 per diluted share, of contract termination, severance and other charges) are as follows:
| • | Revenue increased 9.7% to $263.4 million. |
| • | Operating income of $35.5 million increased $14.6 million. |
| • | Net income increased $8.5 million to $20.7 million. |
| • | Diluted earnings per share of $0.32 increased $0.14 per share. |
On a non-GAAP basis (which excludes the $12.6 million charge from the 2003 first quarter results) first quarter 2004 operating income increased 5.8%, net income increased 2.7%, and diluted earnings per share increased 6.7%.
“We are very pleased with our first quarter results,” stated Lee Kennedy, chairman, president and chief executive officer of Certegy Inc. “We are particularly encouraged by the performance of Check Services, which achieved double-digit revenue and profit growth. Our North American card business also generated strong, consistent results.”
 |
SEGMENT RESULTS
Card Services generated revenue of $162.7 million in the first quarter of 2004, an increase of 3.5% above the 2003 quarter. Strong revenue growth of 10.8% in the Company’s North American card issuing operation resulted from growth in transactions, new sales of e-banking services and card loyalty programs, and one month of revenue from the acquisition of Crittson Financial LLC (“Crittson”). Merchant processing revenue increased by 7.4%, driven by strong retail sales and one month of revenue from the acquisition of Crittson. International card issuing revenue declined 17.8%, caused primarily by the deconversion of Banco Real in the prior year first quarter. Card Services operating income of $32.4 million increased $12.4 million compared to $20.0 million in the first quarter of 2003. The prior year quarter included an $11.5 million charge for contract termination and severance costs. Excluding this charge, operating income increased 3.0%.
Check Services generated revenue of $100.7 million in the first quarter of 2004, an increase of 21.3% over the 2003 quarter. The strong revenue growth was driven by higher retail sales, new customer signings and continued migration of verification volume to guarantee volume. These results also include one month of revenue from the acquisition of Game Financial Corporation. Check Services operating income of $8.8 million increased by $2.8 million, compared to $6.0 million in the corresponding 2003 quarter. The prior year quarter included a $1.0 million charge for contract termination and severance costs. Excluding this charge, operating income increased by 25.3%.
Corporate expense of $5.6 million increased by $0.6 million compared to $5.0 million in the first quarter of 2003.
BUSINESS DEVELOPMENTS
Certegy’s global card base was 46.8 million at quarter-end. A 16.4% increase in debit transactions contributed to overall domestic card transaction growth of 9.6%. Recent new customer announcements include agreements to provide credit card processing services to American Airlines Credit Union and e-banking and electronic bill payment services to Travis Credit Union.
Check guarantee volumes increased 12.7% compared to the prior year quarter, driven by strong retail sales. New check customer signings include DSW Shoe Warehouse and the Sharper Image.
The Company completed two strategic acquisitions in early March. The acquisition of Crittson Financial LLC further strengthens Certegy’s U.S. market share as the leading third party credit card processor for community banks and credit unions. The acquisition of Game Financial Corporation positions Certegy as a leading provider of comprehensive cash access services in the fast-growing gaming industry, and broadens the Company’s check risk management product line and customer base.
|
|
OUTLOOK
Certegy revised its full year 2004 guidance as follows, to reflect its acquisitions and stronger than expected financial results in the first quarter:
| • | Revenue is expected to grow by 13% to 15% in 2004, compared with prior year. |
| • | Operating income is expected to grow by 12% to 15% in 2004, compared with prior year non-GAAP results which exclude 2003 charges of $12.2 million. |
| • | Diluted earnings per share is expected to range from $1.69 to $1.73. |
The Company expects to achieve diluted earnings per share of $0.37 to $0.38 in the second quarter of 2004, with revenue growth in the mid-teens, as compared with the prior year second quarter.
TELECONFERENCE
Management will host a teleconference to discuss first quarter earnings on Wednesday, April 21, 2004, at 9:00 a.m. Eastern Time. The live audio Webcast will be available at www.certegy.com. Please be advised that Microsoft’s Windows Media PlayerTM must be downloaded prior to accessing the Webcast. It can be downloaded from www.microsoft.com/windows/mediaplayer. A replay of the Webcast will be available in the Investor Center section of the website after the call ends.
###
Certegy (NYSE:CEY) provides credit and debit processing, check risk management and check cashing services, merchant processing and e-banking services to nearly 7,000 financial institutions, 117,000 retailers and 100 million consumers worldwide. Headquartered in Alpharetta, Georgia, Certegy maintains a strong global presence with operations in the United States, United Kingdom, Ireland, France, Chile, Brazil, Australia and New Zealand. As a leading payment services provider, Certegy offers a comprehensive range of transaction processing services, check risk management solutions and integrated customer support programs that facilitate the exchange of business and consumer payments. Certegy generated over $1.0 billion in revenue in 2003. For more information on Certegy, please visit www.certegy.com.
###
Forward Looking Statement
The statements in this release may include forward-looking statements that are based on current expectations, assumptions, estimates, and projections about Certegy and our industry. They are not guarantees of future performance and are subject to risks and uncertainties, many of which are outside of Certegy’s control that may cause actual results to differ significantly from what is expressed in those statements. Factors that could, either individually or in the aggregate, affect our performance are described in detail in the section entitled “Certain Factors Affecting Forward-Looking Statements” in our 2003 Annual Report on Form 10-K filed on February 17, 2004, with the SEC.
|
|
CERTEGY INC.
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003
(In thousands, except per share amounts)
(Unaudited)
| Three Months Ended March 31, |
||||||||
| 2004 |
2003 |
|||||||
| Revenues |
$ | 263,409 | $ | 240,169 | ||||
| Operating expenses(1): |
||||||||
| Costs of services |
198,293 | 177,893 | ||||||
| Selling, general and administrative |
29,570 | 28,680 | ||||||
| Other charges(2) |
— | 12,640 | ||||||
| 227,863 | 219,213 | |||||||
| Operating income |
35,546 | 20,956 | ||||||
| Other income, net |
220 | 155 | ||||||
| Interest expense |
(2,976 | ) | (1,681 | ) | ||||
| Income before income taxes |
32,790 | 19,430 | ||||||
| Provision for income taxes |
(12,132 | ) | (7,238 | ) | ||||
| Net income |
$ | 20,658 | $ | 12,192 | ||||
| Basic earnings per share: |
||||||||
| Net income |
$ | 0.32 | $ | 0.19 | ||||
| Average shares outstanding |
63,677 | 65,840 | ||||||
| Diluted earnings per share: |
||||||||
| Net income |
$ | 0.32 | $ | 0.18 | ||||
| Average shares outstanding |
64,643 | 66,202 | ||||||
Revenues and operating income of the Company’s reportable segments for the three months ended March 31, 2004 and 2003 are as follows:
| Three Months Ended March 31, |
||||||||
| 2004 |
2003 |
|||||||
| Revenues: |
||||||||
| Card Services |
$ | 162,723 | $ | 157,176 | ||||
| Check Services |
100,686 | 82,993 | ||||||
| $ | 263,409 | $ | 240,169 | |||||
| Operating income(2): |
||||||||
| Card Services |
$ | 32,383 | $ | 19,958 | ||||
| Check Services |
8,767 | 5,974 | ||||||
| 41,150 | 25,932 | |||||||
| General corporate expense |
(5,604 | ) | (4,976 | ) | ||||
| $ | 35,546 | $ | 20,956 | |||||
| (1) | Certain 2003 expenses have been reclassified between costs of services and selling, general and administrative to conform to the current year presentation. |
| (2) | See Item 10 in the Supplemental Information for details of other charges. |
CERTEGY INC.
CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2004 AND DECEMBER 31, 2003
(In thousands)
| March 31, 2004 |
December 31, 2003 |
|||||||
| (Unaudited) | ||||||||
| ASSETS |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 46,530 | $ | 22,280 | ||||
| Settlement deposits |
41,339 | 29,638 | ||||||
| Trade accounts receivable, net of allowance for doubtful accounts of $2,093 and $1,883, respectively |
94,949 | 108,158 | ||||||
| Settlement receivables |
66,594 | 65,172 | ||||||
| Claims recoverable |
29,691 | 46,478 | ||||||
| Other current assets |
57,488 | 49,902 | ||||||
| Total current assets |
336,591 | 321,628 | ||||||
| Property and equipment, net |
61,800 | 58,897 | ||||||
| Goodwill, net |
224,709 | 187,627 | ||||||
| Other intangible assets, net |
46,872 | 31,799 | ||||||
| Systems development and other deferred costs, net |
118,743 | 118,788 | ||||||
| Other assets, net |
70,741 | 66,308 | ||||||
| Total assets |
$ | 859,456 | $ | 785,047 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||
| Current liabilities: |
||||||||
| Trade accounts payable |
$ | 20,555 | $ | 22,280 | ||||
| Settlement payables |
107,933 | 94,810 | ||||||
| Claims payable |
19,838 | 38,270 | ||||||
| Accrued salaries and bonuses |
8,961 | 12,324 | ||||||
| Income taxes payable |
9,666 | 8,887 | ||||||
| Other current liabilities |
91,047 | 67,522 | ||||||
| Total current liabilities |
258,000 | 244,093 | ||||||
| Long-term debt |
274,602 | 222,399 | ||||||
| Deferred income taxes |
50,996 | 43,939 | ||||||
| Other long-term liabilities |
15,454 | 13,477 | ||||||
| Total liabilities |
599,052 | 523,908 | ||||||
| Shareholders’ equity: |
||||||||
| Common stock |
695 | 695 | ||||||
| Paid-in capital |
251,030 | 249,351 | ||||||
| Retained earnings |
243,957 | 226,495 | ||||||
| Deferred compensation |
(13,126 | ) | (10,187 | ) | ||||
| Accumulated other comprehensive loss |
(74,422 | ) | (75,854 | ) | ||||
| Treasury stock |
(147,730 | ) | (129,361 | ) | ||||
| Total shareholders’ equity |
260,404 | 261,139 | ||||||
| Total liabilities and shareholders’ equity |
$ | 859,456 | $ | 785,047 | ||||
CERTEGY INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003
(In thousands)
(Unaudited)
| Three Months Ended March 31, |
||||||||
| 2004 |
2003 |
|||||||
| Cash flows from operating activities: |
||||||||
| Net income |
$ | 20,658 | $ | 12,192 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
| Depreciation and amortization |
11,084 | 9,812 | ||||||
| Amortization of deferred compensation and financing costs |
1,551 | 1,117 | ||||||
| Other non-cash items |
— | 2,670 | ||||||
| Deferred income taxes |
5,623 | 558 | ||||||
| Changes in assets and liabilities: |
||||||||
| Accounts receivable, net |
20,308 | 17,121 | ||||||
| Current liabilities, excluding settlement and claims payables |
(10,876 | ) | 4,435 | |||||
| Claims accounts, net |
(1,348 | ) | (2,854 | ) | ||||
| Other current assets |
858 | 3,148 | ||||||
| Other long-term liabilities |
1,976 | (180 | ) | |||||
| Other assets |
(7,004 | ) | 543 | |||||
| Net cash provided by operating activities |
42,830 | 48,562 | ||||||
| Cash flows from investing activities: |
||||||||
| Capital expenditures |
(7,111 | ) | (8,432 | ) | ||||
| Acquisitions, net of $24,638 of cash acquired |
(39,191 | ) | — | |||||
| Net cash used in investing activities |
(46,302 | ) | (8,432 | ) | ||||
| Cash flows from financing activities: |
||||||||
| Net borrowings (repayments) on revolving credit facility |
50,000 | (7,200 | ) | |||||
| Treasury stock purchases |
(20,777 | ) | (11,796 | ) | ||||
| Dividends paid |
(3,218 | ) | — | |||||
| Proceeds from exercise of stock options |
1,646 | 491 | ||||||
| Other |
(90 | ) | — | |||||
| Net cash provided by (used in) financing activities |
27,561 | (18,505 | ) | |||||
| Effect of foreign currency exchange rates on cash |
161 | (1,194 | ) | |||||
| Net cash provided |
24,250 | 20,431 | ||||||
| Cash and cash equivalents, beginning of period |
22,280 | 14,166 | ||||||
| Cash and cash equivalents, end of period |
$ | 46,530 | $ | 34,597 | ||||
CERTEGY INC.
SUPPLEMENTAL INFORMATION
(Unaudited)
| 1. | Revenues by product and service offering are as follows (in thousands): | ||||||||||||||||||||
| 2003 |
2004 | ||||||||||||||||||||
| 1st Qtr |
2nd Qtr |
3rd Qtr |
4th Qtr |
Year |
1st Qtr | ||||||||||||||||
| Card Issuer Services | $ | 113,470 | $ | 114,298 | $ | 116,408 | $ | 118,346 | $ | 462,522 | $ | 117,862 | |||||||||
| Check Services | 82,993 | 87,076 | 91,743 | 109,189 | 371,001 | 100,686 | |||||||||||||||
| Merchant Processing | 40,385 | 43,679 | 44,216 | 42,068 | 170,348 | 43,363 | |||||||||||||||
| Software and Support | 3,321 | 2,339 | 3,424 | 2,509 | 11,593 | 1,498 | |||||||||||||||
| $ | 240,169 | $ | 247,392 | $ | 255,791 | $ | 272,112 | $ | 1,015,464 | $ | 263,409 | ||||||||||
| 2. | Revenues by geographic area (based on location of customer) are as follows (in thousands): | ||||||||||||||||||||
| 2003 |
2004 | ||||||||||||||||||||
| 1st Qtr |
2nd Qtr |
3rd Qtr |
4th Qtr |
Year |
1st Qtr | ||||||||||||||||
| Domestic | $ | 195,090 | $ | 208,169 | $ | 216,805 | $ | 227,789 | $ | 847,853 | $ | 221,547 | |||||||||
| International | 45,079 | 39,223 | 38,986 | 44,323 | 167,611 | 41,862 | |||||||||||||||
| $ | 240,169 | $ | 247,392 | $ | 255,791 | $ | 272,112 | $ | 1,015,464 | $ | 263,409 | ||||||||||
| 3. | Revenues are comprised of the following (in thousands): | ||||||||||||||||||||
| 2003 |
2004 | ||||||||||||||||||||
| 1st Qtr |
2nd Qtr |
3rd Qtr |
4th Qtr |
Year |
1st Qtr | ||||||||||||||||
| Product and Service Fees | $ | 191,527 | $ | 193,657 | $ | 203,929 | $ | 222,088 | $ | 811,201 | $ | 210,984 | |||||||||
| Interchange Fees | 31,699 | 34,508 | 34,582 | 32,211 | 133,000 | 33,648 | |||||||||||||||
| Reimbursable Expenses | 16,943 | 19,227 | 17,280 | 17,813 | 71,263 | 18,777 | |||||||||||||||
| $ | 240,169 | $ | 247,392 | $ | 255,791 | $ | 272,112 | $ | 1,015,464 | $ | 263,409 | ||||||||||
| 4. | Currency translation increased (decreased) revenues and operating income for the three months ended March 31, 2004 as compared with the prior year as follows (in thousands): | ||||||||||||||||||||
| Revenues |
Operating Income |
||||||||||||||||||||
| Card Services | $ | 3,298 | $ | (329 | ) | ||||||||||||||||
| Check Services | 2,211 | 398 | |||||||||||||||||||
| $ | 5,509 | $ | 69 | ||||||||||||||||||
| 5. | Check volumes in dollars are as follows (in millions): | ||||||||||||||||||||
| 2003 |
2004 | ||||||||||||||||||||
| 1st Qtr |
2nd Qtr |
3rd Qtr |
4th Qtr |
Year |
1st Qtr | ||||||||||||||||
| Domestic | $ | 7,145 | $ | 7,499 | $ | 7,783 | $ | 9,368 | $ | 31,795 | $ | 8,206 | |||||||||
| International | 761 | 811 | 830 | 995 | 3,397 | 925 | |||||||||||||||
| $ | 7,906 | $ | 8,310 | $ | 8,613 | $ | 10,363 | $ | 35,192 | $ | 9,131 | ||||||||||
| Guarantee | $ | 6,251 | $ | 6,606 | $ | 6,962 | $ | 8,220 | $ | 28,039 | $ | 7,048 | |||||||||
| Verification | 1,655 | 1,704 | 1,651 | 2,143 | 7,153 | 2,083 | |||||||||||||||
| $ | 7,906 | $ | 8,310 | $ | 8,613 | $ | 10,363 | $ | 35,192 | $ | 9,131 | ||||||||||
CERTEGY INC.
SUPPLEMENTAL INFORMATION, CONTINUED
(Unaudited)
| 6. | Number of cards and accounts processed (end of period) are as follows (in thousands): |
| 2003 |
2004 | |||||||||
| 1st Qtr |
2nd Qtr |
3rd Qtr |
4th Qtr |
1st Qtr | ||||||
| Cards: |
||||||||||
| Domestic |
22,695 | 22,969 | 23,304 | 23,364 | 23,466 | |||||
| International |
23,148 | 22,095 | 21,914 | 23,083 | 23,359 | |||||
| 45,843 | 45,064 | 45,218 | 46,447 | 46,825 | ||||||
| Accounts: |
||||||||||
| Domestic |
17,372 | 17,601 | 17,860 | 17,957 | 18,069 | |||||
| International |
20,016 | 19,055 | 18,917 | 20,075 | 20,282 | |||||
| 37,388 | 36,656 | 36,777 | 38,032 | 38,351 | ||||||
American Express cards and accounts processed in the Caribbean in 2003 have been reclassified from domestic to international.
| 7. | Merchant volumes in dollars and number of transactions are as follows: |
| 2003 |
2004 | |||||||||||||||||
| 1st Qtr |
2nd Qtr |
3rd Qtr |
4th Qtr |
Year |
1st Qtr | |||||||||||||
| Dollars (in millions) |
$ | 1,763 | $ | 1,882 | $ | 1,960 | $ | 1,861 | $ | 7,466 | $ | 1,869 | ||||||
| Number of |
||||||||||||||||||
| Transactions (in thousands) |
20,616 | 21,743 | 22,724 | 21,533 | 86,616 | 20,755 | ||||||||||||
| 8. | Depreciation and amortization by segment is as follows (in thousands): |
| 2003 |
2004 | |||||||||||||||||
| 1st Qtr |
2nd Qtr |
3rd Qtr |
4th Qtr |
Year |
1st Qtr | |||||||||||||
| Card Services |
$ | 7,715 | $ | 7,999 | $ | 8,400 | $ | 8,106 | $ | 32,220 | $ | 7,985 | ||||||
| Check Services |
1,801 | 2,001 | 2,384 | 2,502 | 8,688 | 2,784 | ||||||||||||
| Corporate |
296 | 250 | 272 | 304 | 1,122 | 315 | ||||||||||||
| $ | 9,812 | $ | 10,250 | $ | 11,056 | $ | 10,912 | $ | 42,030 | $ | 11,084 | |||||||
| 9. | Capital expenditures and acquisitions are as follows (in thousands): |
| 2003 |
2004 | |||||||||||||||||
| 1st Qtr |
2nd Qtr |
3rd Qtr |
4th Qtr |
Year |
1st Qtr | |||||||||||||
| Capital expenditures |
$ | 8,432 | $ | 15,138 | $ | 10,722 | $ | 9,663 | $ | 43,955 | $ | 7,111 | ||||||
| Acquisitions, net of cash acquired |
$ | — | $ | — | $ | 4,521 | $ | — | $ | 4,521 | $ | 39,191 | ||||||
CERTEGY INC.
SUPPLEMENTAL INFORMATION, CONTINUED
(Unaudited)
| 10. | Other charges: |
Other charges of $12.6 million ($7.9 million after-tax, or $0.12 per diluted share) in the first quarter of 2003 represent $9.6 million of early termination costs associated with a data processing contract and $3.0 million of other net charges primarily related to the downsizing of the Company’s Brazilian card operation. A reconciliation of the first quarter 2003 actual results to the first quarter 2003 non-GAAP results that exclude other charges is as follows (in thousands):
| Other Charges |
||||||||||||
| Actual |
Non-GAAP |
|||||||||||
| Revenues |
$ | 240,169 | $ | — | $ | 240,169 | ||||||
| Operating expenses |
219,213 | (12,640 | ) | 206,573 | ||||||||
| Operating income |
20,956 | 12,640 | 33,596 | |||||||||
| Other income, net |
155 | — | 155 | |||||||||
| Interest expense |
(1,681 | ) | — | (1,681 | ) | |||||||
| Income before income taxes |
19,430 | 12,640 | 32,070 | |||||||||
| Provision of income taxes |
(7,238 | ) | (4,708 | ) | (11,946 | ) | ||||||
| Net income |
$ | 12,192 | $ | 7,932 | $ | 20,124 | ||||||
| Basic earnings per share |
$ | 0.19 | $ | 0.12 | $ | 0.31 | ||||||
| Diluted earnings per share |
$ | 0.18 | $ | 0.12 | $ | 0.30 | ||||||
Details of these charges by segment are as follows:
| Card |
Check |
Corp |
Total | |||||||||
| Contract termination costs |
$ | 8,757 | $ | 865 | $ | — | $ | 9,622 | ||||
| Brazil downsizing |
2,740 | — | — | 2,740 | ||||||||
| Other severance charges |
— | 156 | — | 156 | ||||||||
| Write-down of collateral assignment in life insurance policies |
— | — | 122 | 122 | ||||||||
| $ | 11,497 | $ | 1,021 | $ | 122 | $ | 12,640 | |||||
11. Long-term debt at March 31, 2004 and December 31, 2003 consists of:
| March 31, 2004 |
December 31, 2003 | |||||
| Unsecured notes, 4.75%, due 2008, net of unamortized discount |
$ | 199,451 | $ | 199,420 | ||
| Borrowings under revolving credit facility |
50,000 | — | ||||
| Notes payable, variable rate, due 2009 |
22,364 | 22,364 | ||||
| Capital lease obligations |
2,787 | 615 | ||||
| $ | 274,602 | $ | 222,399 | |||
| 12. | Stock repurchase activity: |
We repurchased 663,573 shares of common stock during the first quarter of 2004 at a total cost of $22.5 million. Approximately $1.7 million of these repurchases did not settle until April 2004 therefore, our cash flow statement reflects $20.8 million of cash used for repurchases in the first quarter. At March 31, 2004, we had $17.5 million of remaining repurchase authority.
13. Balance Sheet:
The March 31, 2004 balance sheet reflects preliminary purchase price allocations of the acquisitions of Crittson Financial LLC and Game Financial Corporation. Certain accounts are subject to adjustment as these purchase price allocations are finalized.