10-KPeriod: FY2014

GLOBAL PAYMENTS INC Annual Report, Year Ended May 31, 2014

Filed July 29, 2014For Securities:GPN

Summary

GLOBAL PAYMENTS INC. (GPN) reported a strong fiscal year ended May 31, 2014, with a 7.5% increase in revenue to $2.55 billion, driven by growth across its North America and International merchant services segments. Net income attributable to Global Payments rose by 13.5% to $245.3 million, leading to diluted earnings per share of $3.37, up from $2.76 in the prior year. This financial growth was supported by strategic acquisitions, notably the integration of PayPros, which bolstered the company's direct channel capabilities in the United States. The company also successfully refinanced its debt, securing a $1.25 billion term loan and a $1 billion revolving credit facility, which provided flexibility for future strategic initiatives. Despite facing some operational challenges, including the lingering effects of a past processing system intrusion, Global Payments demonstrated resilience and a commitment to enhancing its service offerings and market position globally. The company's performance indicates positive momentum, with solid revenue and profit growth, supported by expansion in key international markets and continued investment in its technological infrastructure.

Financial Highlights

25 data points
Beta

Revenue

$2.55B

Net Income

$245.29M

9.6% Net Margin

EPS (Diluted)

$1.69

Free Cash Flow

$194.10M

Financial Statements
Beta
Revenue$2.55B
SG&A Expenses$1.20B
Operating Expenses$2.15B
Operating Income$405.50M
Interest Expense$37.50M
Net Income$245.29M
EPS (Basic)$1.70
EPS (Diluted)$1.69
Shares Outstanding (Basic)144.24M
Shares Outstanding (Diluted)145.38M

Key Highlights

  • 1Revenue increased by 7.5% to $2.55 billion in fiscal 2014.
  • 2Net income attributable to Global Payments grew by 13.5% to $245.3 million.
  • 3Diluted earnings per share rose to $3.37 from $2.76 in the prior fiscal year.
  • 4Acquired Payment Processing, Inc. (PayPros) for $420 million to expand U.S. direct channel capabilities.
  • 5Secured new financing with a $1.25 billion term loan and a $1 billion revolving credit facility.
  • 6North America merchant services segment revenue grew 6.1%, and International merchant services segment revenue increased by 11.2%.
  • 7Operating income increased by 13.5% to $405.5 million, with a positive credit related to a past processing system intrusion.

Frequently Asked Questions

Revenue growth was primarily driven by expansion in its U.S. direct channels, including the acquisition of PayPros, as well as solid performance in Canada, European markets, and the Asia Pacific region. Growth in transaction volumes and strategic pricing adjustments also contributed to the increase.

The acquisition of PayPros, completed in March 2014 for $420 million, was a key strategic move to enhance Global Payments' direct distribution capabilities in the United States. It specifically strengthened its offerings for small-to-medium sized merchants through technology-based enterprise software partners, complementing existing offerings.

In February 2014, Global Payments secured a $1.25 billion term loan and a $1 billion revolving credit facility. This refinancing allowed the company to repay existing debt and provided capital for strategic growth initiatives. The company reported substantial cash and cash equivalents, indicating sufficient liquidity for operations and future plans.

The North America merchant services segment saw revenue increase by 6.1% to $1.81 billion, with operating margins around 15.0%. The International merchant services segment showed stronger growth, with revenue up 11.2% to $745.2 million and robust operating margins of 32.2%. Both segments contributed positively to the overall financial performance.