Before we begin, I'd like to remind you that some of our discussions may contain statements of a forward-looking nature, which represent management's beliefs and assumptions concerning future events. Forward-looking statements involve risks, uncertainties and assumptions that are based on information currently available to us. Actual results may differ materially from those expressed in the forward-looking statements due to many factors. Information concerning these factors is contained in the report of our financial results we released earlier this morning and in the company’s SEC filings. We undertake no obligation to update any forward-looking statements made during this call to reflect events or circumstances that may arise after this call.Now, I'd like to turn the call over to Bob Carr. Robert O. Carr Thank you, Maria, and good morning, everyone. I'd like to thank you all for joining us today and for your interest in Heartland. As you saw in our financial results for the first quarter, we reported adjusted net income of $15.7 million, or $0.39 per share, both increases of 70% compared to the comparable figures in the same quarter last year. For the quarter, we achieved record operating income and what has typically been our weakest quarter, and while absorbing $1 million in Summit expense. Our performance in the quarter was driven by a combination of a strong execution of our strategy to improve growth and achieve greater cost efficiencies as well as an economic backdrop that is as good as we have seen since the onset of the recession. This combination led to an 8.3% improvement in our card processing volume in the quarter, a slight acceleration from our growth rate last quarter aided by lower volume attrition and better same-store sales performance. Volume attrition in the quarter was actually the best we've seen since 2007. From a competitive standpoint, the pricing umbrella provided by competitors, who don't pass through the Durbin reductions, extended into the first quarter as we enjoyed strong margins on new business.
In the quarter, gross margin installed was up over 15% compared to the first quarter of last year, growing at the fastest rate in several years and reaching at the highest absolute level in 3 years. The annual margin per installed contracts surpassed the record levels achieved in last year's fourth quarter, hitting nearly $1,300 per card payment merchant installed. The nearly $150 million of Durbin savings that we've passed through to our merchants is providing our relationship managers with the tangible measure of the same [ph] they can show their prospects, but more importantly, is [ph] proving to be a powerful marketing tool by demonstrating our own [ph] transparent pricing philosophy. Delivering this message to the market on a consistent basis will win over the longer term as we build strong enduring relationships with merchants who want to do business with a company they can trust.Performance in our non-card businesses was equally impressive. Our payroll, equipment and SmartLink revenues continue to grow nicely. In addition, the integration of our various K-12 school acquisitions is going well. Plans are underway to leverage the growth financial of the K-12 platform as a channel to introduce new convenient services to the parents of the 12 million schoolchildren and to whom we are now connected. Both card and non-card growth continues to be driven by the increased productivity of our sales organization. Their efforts were recently recognized with the Silver Stevie Award in the sales department of the year category, earned at the Sixth Annual Stevie Awards for sales and customer service. Relationship manager comp ended the quarter up 76 from the June 30 of low. That's a better than 10% increase. While existing relationship managers keep reducing at record levels, it is encouraging to see the contribution from our new hires increasing. New margin installed by new relationship managers was a record in the first quarter and up almost 300% compared to the first quarter of last year. Our ability to add highly productive new relationship managers is crucial to our continued growth. This is an area getting a lot of manager retention as we work to improve the productivity and reduce the turnover of our new hires. Read the rest of this transcript for free on seekingalpha.com