* Q4 EPS $0.06 vs $0.72 a year earlier
* Takes $84.4 mln pre-tax charge for breach costs
* To buy rest of JV with HSBC for $242 mln
* Authorizes new $150 mln buy back
* Sees additional charges in 2013
July 26 Global Payments Inc's
fourth-quarter profit fell 90 percent on costs related to a
security breach affecting about 1.5 million cardholders and the
payment processor said it expects to take more charges in 2013.
In March, Global Payments said an "unauthorized access" had
been made into its systems, compromising credit card data.
Following the breach, card network Visa Inc dropped the
company from its list of approved service providers.
The payment processor took an $84.4 million pre-tax charge
related to the breach in the fourth quarter, including an
estimate of costs from the card brands and investigation of the
Global Payments anticipates additional charges of $25
million to $35 million in 2013, after insurance proceeds of
about $28 million are applied, a company executive said on a
post-earnings conference call.
Global Payments said it has completed its investigation into
the breach, and a qualified security assessor was conducting the
independent review needed to return the company to the lists of
BUYS OUT HSBC JV
Global Payments has been making strategic investments to
grow its business. As part of the build-out it said it would buy
the remaining 44 percent of its payment processing joint venture
with HSBC Holdings for $242 million.
The joint venture, which provides payment processing
services to merchants in the Asia-Pacific region, began in 2006.
The deal allows to it to expand further into India, by
targeting more payment processing partners.
Global Payments said the acquisition would add as much as 7
cents to both its cash and net earnings per share in 2013.
It plans to use existing cash and lines of credit to fund
the transaction, which is slated to close in the second quarter.
Global Payments' board also authorized a new $150 million
share repurchase program. The authorization has no expiration
Net income attributable to Global Payments fell in the
fourth quarter to $5.1 million, or 6 cents a share, from $58.6
million, or 72 cents a share a year ago.
Cash earnings, excluding the data breach charge, were 97
cents a share in the quarter, Atlanta-based Global Payments
said. Revenue grew 15 percent to $597 million.
For the 2013 year, the company expects cash earnings per
share of between $3.59 and $3.66, on revenue of between $2.36
billion and $2.4 billion.
The company expects first-quarter cash earnings per share to
be slightly down from a year ago, due to currency headwinds,
executives said on the analyst call.
Shares of the company closed at $42.51 on Thursday on the
New York Stock Exchange.