News

Concord reports diluted EPS of 72 cents for '03

February 22, 2004

MEMPHIS, Tenn. - Transaction processor Concord EFS Inc., which is being acquired by First Data Corp., reported earnings rose to $93.1 million, or 20 cents per share, from $89.1 million, or 18 cents per share in 2002's fourth quarter.

Excluding charges related to the proposed merger, the company earned 21 cents per share. Factoring in merger-related charges of $5.5 million in the fourth quarter, Concord earned 20 cents a share.

Concord shareholders will vote on the merger on Feb. 26; First Data has said it expects the merger to close on Feb. 27.

Quarterly revenue rose by 9 percent to $592.1 million from $542.3 million. Gross margin in the fourth quarter was 29.2 percent, up 26 basis points over the same period a year earlier and up 87 basis points from the third quarter.

For the full year, revenue was $2.3 billion, up 15 percent on transaction growth of 16 percent. Diluted EPS was 72 cents, up 25 percent over 2002. Results include merger, acquisition, restructuring and write-off charges of $22.9 million in 2003, and acquisition, restructuring and write-off charges of $77.5 million and litigation settlement charges of $8.8 million in 2002.

Excluding charges, EPS rose 12 percent to 76 cents in 2003, consistent with the company's previously announced expectations.

For the year, Network Services revenue rose 7 percent to $657.1 million on transaction volume growth of 11 percent. Transaction growth was largely driven by Star's PIN-based debit transactions, up 17 percent for the year to 3.5 billion transactions in 2003. PIN debit transactions now represent 51 percent of all Network Services' 6.8 billion transactions.

Star ended the year with 135 million cardholders and approximately 1.26 million ATM and point-of-sale locations. Concord currently provides processing for 20.8 million debit cards and approximately 93,200 ATMs.

Payment Services revenue was $1.6 billion in 2003, up 19 percent over 2002. This revenue includes interchange fees of $1 billion in 2003, up 26 percent as compared to 2002. Payment Services revenue, net of interchange fees, increased 9 percent in 2003.

Payment Services transaction volume was 5.6 billion for the year, up 24 percent over 2002, including 21 percent growth in acquired credit and signature debit to 3.5 billion transactions; 21 percent growth in acquired PIN-based debit to 1.3 billion transactions; and 31 percent growth in electronic benefits transfer to 447 million transactions.

Payment Services provides payment processing services for approximately 457,000 merchant locations, which represents a net increase of approximately 46,000 locations for the year.