STRATEGIC PARTNERS
July 30, 2002
MEMPHIS, Tenn. -- Transaction processor Concord EFS reported revenue growth of 28 percent in the second quarter of 2002 compared to 2001.
Net income and earnings per share were up 34 percent and 28 percent, respectively, excluding charges related to restructuring and a litigation settlement incurred in the second quarter.
Concord incurred a charge of $18.9 million, net of taxes, in conjunction with the May 17 acquisition of Core Data Resources and company-wide consolidation initiatives designed to integrate acquisitions and improve overall operating efficiency. Concord also incurred a one-time charge of $13.5 million, net of taxes, in connection with the settlement of a previously disclosed purported class action lawsuit in which Concord's EFS National Bank was named a defendant.
Including charges, net income was $63.2 million, compared to $71.1 million in 2001's second quarter; earnings per share was 12 cents, compared to 14 cents for the same period in 2001.
Second quarter revenue growth was spurred by acquisitions and 30 percent growth in PIN-secured debit transactions quarter over quarter, as well as increases in the point-of-sale interchange rate, according to Dan M. Palmer, Concord's chairman and chief executive officer.
"Additionally, our sales force has been producing excellent results, adding participants to the STAR network and cross-selling ATM and card processing services at a rate that outpaced last year's strong first half performance," Palmer said. "At this time, we expect that revenue growth will continue to accelerate during the remainder of 2002."
The acquisition of Core Data added 35,000 ATMs to Concord's ATM processing services. Concord now drives 93,800 ATMs for financial institutions and retailers nationwide.
Concord's Star network added 45,000 new merchant locations that accept Star-branded cards for payment during the first half 2002, for a total of 895,000 retail locations across the U.S.
Concord also said it signed new processing contracts with 219 financial institutions in the first half of 2002 and added 141 new financial institutions to the Star network. In June, Dillard's, Inc., signed a long-term agreement with Concord for credit and debit card processing in its 300-plus stores. Concord currently processes for 31 of the top 100 retailers in the U.S.
