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Fiserv Reports Third Quarter 2013 Results

Fiserv, Inc. (NASDAQ: FISV), a leading global provider of financial services technology solutions, today reported financial results for the third quarter of 2013.

GAAP revenue in the third quarter was $1.20 billion compared with $1.11 billion in the third quarter of 2012. Adjusted revenue was $1.14 billion in the third quarter compared with $1.04 billion in the third quarter of 2012, an increase of 10 percent. For the first nine months of 2013, GAAP revenue was $3.55 billion compared with $3.29 billion for the first nine months of 2012. Adjusted revenue was $3.36 billion in the first nine months of 2013 compared with $3.08 billion in the same period in 2012, an increase of 9 percent.

GAAP earnings per share from continuing operations in the third quarter was $1.22 compared with $1.03 in the third quarter of 2012. GAAP earnings per share from continuing operations for the first nine months of 2013 was $3.22, which included Open Solutions merger and integration expenses of $0.34 per share, compared with $3.14 for the first nine months of 2012.

Adjusted earnings per share from continuing operations in the third quarter increased 24 percent to $1.56 compared with $1.26 in the same period in 2012. Adjusted earnings per share from continuing operations in the first nine months of 2013 increased 18 percent to $4.39 compared with $3.71 for the first nine months of 2012.

“Results for the quarter were solid across the board and in-line with our performance expectations for the full year," said Jeffery Yabuki, President and Chief Executive Officer of Fiserv. "Strength in our payments businesses along with continued strong sales is compelling evidence of the market-leading differentiation and value embedded in our solutions."

Third Quarter 2013

  • Adjusted revenue grew 10 percent in the quarter to $1.14 billion and increased 9 percent year-to-date to $3.36 billion over the prior year periods.
  • Adjusted internal revenue growth in the quarter was 3 percent for the company, with 5 percent growth in the Payments segment and 1 percent growth in the Financial segment.
  • Adjusted internal revenue grew 2 percent for the first nine months of 2013, with 4 percent growth in the Payments segment. Financial segment adjusted internal revenue was flat compared with the first nine months of 2012.
  • Adjusted earnings per share increased 24 percent in the quarter to $1.56 and increased 18 percent in the first nine months of 2013 to $4.39, as compared with the prior year periods.
  • Free cash flow grew 21 percent in the first nine months of 2013 to $598 million compared with $496 million in the prior year period.
  • Adjusted operating margin was 30.5 percent in the quarter, an increase of 60 basis points compared with the third quarter of 2012, and increased 50 basis points to 29.8 percent in the first nine months of 2013, compared with the prior year period.
  • The company repurchased 2.0 million shares of common stock in the quarter for $192 million and for the first nine months of 2013 has repurchased 5.2 million shares for $463 million. The company announced a new 10.0 million share repurchase authorization in the quarter and had 10.4 million shares authorized for repurchase as of September 30, 2013.
  • Actual sales were up 13 percent in the quarter and 11 percent in the first nine months of 2013 compared with the prior year periods.
  • The company signed 11 new DNA TM account processing clients in the quarter and 21 for the first nine months of the year.
  • The company signed 136 Mobiliti clients in the quarter, for a total of 324 for the year, and has added more than 1,700 mobile banking clients to date.
  • The company signed 56 Popmoney ® clients in the quarter and the network now includes more than 2,000 financial institutions.
  • The company signed 90 electronic bill payment clients and 27 debit processing clients in the quarter.

Recent Developments

  • On October 25, 2013, the company entered into a new $900 million term loan agreement that matures in 2018. It also entered into an amendment to extend the maturity of its $2 billion revolving credit facility to 2018. The company used the net proceeds from the term loan to repay outstanding borrowings under the revolving credit facility, which were primarily related to the indebtedness assumed in connection with the acquisition of Open Solutions.

Outlook for 2013

Fiserv expects its full year 2013 adjusted earnings per share from continuing operations to be in a range of $5.94 to $6.02, or growth of 17 to 19 percent over 2012. The company expects full year adjusted revenue growth of approximately 10 percent, and adjusted internal revenue growth of approximately 3 percent.

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