STRATEGIC PARTNERS
November 21, 2002
MEMPHIS, Tenn. -- For the second time this month, Concord EFS, Inc. (NYSE: CE), says that its Board of Directors has approved the repurchase of additional common stock.
The latest approval is for $100 million of Concord's common stock. Earlier this month, Concord said its board had approved the repurchase of an additional $150 million of common stock beyond the $250 million approved in August.
The board's approval brings the total potential repurchase amount to $500 million. Under the repurchase plan, Concord may buy back shares of its outstanding stock from time to time either on the open market or through privately negotiated transactions.
While Concord recently reported third-quarter earnings of $93.4 million, an increase of approximately $12 million from 2001's third quarter, the company also warned that its business could slow along with consumer spending. (See related story Concord's 3Q earnings up; company warns of slowdown)
The year-to-date high of Concord shares was $35.06 on May 15. The stock was still trading as high as $28.25 on July 12, but lost 30 percent of its value in late July and early August after the company's earning per share slipped from 14 cents in the second quarter of 2001 to 12 cents during the corresponding period this year.
The price took a particularly steep dive in August when online business site Briefing.com reported that the Securities and Exchange Commission was investigating the company. Concord denied the report.
Philadelphia law firm Spector, Roseman & Kodroff filed a class action against Concord on Nov. 1, alleging that Concord had issued false and misleading statements about its business in order to allow Concord stock to trade at artificially inflated levels.
"Defendants repeatedly misrepresented the strength of Concord's operating performance and its ability to post 30 percent to 35 percent earnings per share growth in order to prop up the price of Concord stock so that defendants could complete acquisitions using Concord's stock as currency and sell off 5.4 million of their own Concord shares at prices as high $32.07 per share, for over $160 million in proceeds," according to the suit.
Concord shares were trading at $13.70 on Nov. 21.
