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Heartland Payment Systems Reports Record Quarterly Earnings

Stocks in this article: HPY

Heartland Payment Systems, Inc. (NYSE: HPY), one of the nation's largest payment processors and leading provider of merchant business solutions, today announced Adjusted Net Income and Adjusted Earnings per Share of $23.1 million and $0.62, respectively, for the quarter ended June 30, 2013, compared to Adjusted Net Income and Adjusted Earnings per Share of $20.5 million and $0.51, respectively, for the quarter ended June 30, 2012. GAAP net income from continuing operations for the quarter ended June 30, 2013 was $19.7 million, or $0.53 per share compared to $18.0 million, or $0.43 for the quarter ended June 30, 2012. Adjusted Net Income and Adjusted Earnings per Share are non-GAAP measures that are detailed later in this press release in the section “Reconciliation of Non-GAAP Financial Measures.”

Highlights for the second quarter of 2013 include:

  • Record Small and Mid-Sized Enterprise (SME) quarterly transaction processing volume of $19.3 billion, up 4.2% from the second quarter of 2012
  • Record Quarterly Net Revenue of $149.7 million, up 13.5% from the second quarter of 2012
  • Operating Margin on Net Revenue of 22.3%, compared to 22.0% for the same quarter in 2012; the operating margin for the first six months of this year also increased from the first six months of last year
  • Same store sales rose 1.9% and volume attrition was 12.9% in the second quarter
  • New margin installed of $17.6 million, up 16% from the second quarter of 2012 and the best quarterly new margin installed performance in over three years
  • Share-based compensation reduced earnings by $3.3 million pre-tax, or approximately $0.05 per share, compared to $4.0 million pre-tax, or $0.06 per share in the second quarter of 2012
  • Acquisition-related amortization was $2.3 million pre-tax, or $0.04 per share, in the second quarter, up from $1.1 million pre-tax, or $0.02 per share in the first quarter of 2012

Robert Carr, Chairman and CEO, commented, “Record earnings in the second quarter clearly demonstrate that our strategy to productively grow our sales organization, selectively enhance our core transaction processing capability, and add complementary non-card products to our portfolio is generating double-digit growth in net revenue and operating income. New business continues to gain momentum, as new margin installed grew 16% in the quarter, with new card margin installed growing faster than overall new margin installed. Pricing on new card merchants installed remains attractive, with June being the best month of new card margin installed in nearly five years. Productivity in our sales organization also improved to record levels, and for the second consecutive quarter, we grew the sales organization, achieving net growth of 42 relationship managers. We also achieved improved margins while investing in a variety of growth initiatives. The investments we continue to make across the organization are not only strengthening our performance today, but are positioning us for continued growth over the long term.”

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