News

Heartland reports 70% uptick in Q1 adjusted net income

May 2, 2012

Payment processor Heartland Payment Systems yesterday announced GAAP net income of $13.8 million, or 34 cents per share, for the three months ended March 31, 2012. The company reported adjusted net income and adjusted earnings per share of $15.7 million and 39 cents respectively, compared to $9.2 million and 23 cents respectively for Q1 of 2011.

Highlights for the first quarter of 2012 include:

• Small and mid-sized enterprise quarterly transaction processing volume of $16.7 billion, up 8.3 percent year-over-year.
• Quarterly net revenue of $128.7 million, up 14.2 percent from 2011.
• Operating margin on net revenue of 18.1 percent compared to 12.9 percent for 2011.
• Same store sales up 3.4 percent in the first quarter; volume attrition of 12.2 percent in the first quarter was the lowest since the Q3 of 2007.
• New margin installed of $14.5 million, up 15 percent from 2011.
• Share-based compensation reduced earnings by $2.9 million pre-tax, or approximately 5 cents per share, compared to $2.0 million, or 3 cents per share in the first quarter of 2011.

"We achieved record operating income in the quarter driven by steady improvement across virtually all of our key growth and productivity metrics and by broader participation of our small and mid-sized merchants in the economic recovery," said Robert Carr, Heartland Payments chairman and CEO. "Both our card and non-card businesses posted healthy net revenue growth rates, which we were able to leverage into a 60 percent increase in operating income through ongoing efficiency enhancements.

"Cash flow once again significantly exceeded earnings, which supported our programs to reward shareholders through dividends and share repurchases. Our new sales initiatives have generated strong business momentum, and our commitment to expanding margins has produced excellent results. This has provided a solid foundation to grow our franchise and create value for shareholders."

For full year 2012, Heartland expects net revenue between $530 million and $540 million, with fully diluted adjusted earnings per share between $1.59 and $1.63, before deducting 19 cents per share of after-tax stock compensation expense.