Security Breach Leads To Heartland Payment 1Q Loss

DAVID PITT

PRINCETON, N.J. (AP) — A security breach at credit card processor and payroll services administrator Heartland Payment Systems Inc. has proven costly, driving the company to a first-quarter loss.

The nation's sixth-largest payment processor reported a loss of $2.5 million, or 6 cents a share, compared with a profit of $9 million, or 23 cents a share, the year before.

The results included expenses and accruals of $12.6 million, or 20 cents a share, resulting from a security breach in which criminals secretly installed spying software on its computer network.

Heartland revealed on Jan. 20 that its system used to process Visa, MasterCard, American Express and Discover Card transactions was breached late last year. The company said at the time that the breach did not involve merchant data, cardholders' Social Security numbers, unencrypted personal identification numbers, addresses or telephone numbers.

Excluding the charges, adjusted income was $5.4 million, or 14 cents a share.

Revenue rose to $372.2 million from $339.6 the year before.