10-KPeriod: FY2016

GLOBAL PAYMENTS INC Annual Report, Year Ended May 31, 2016

Filed July 28, 2016For Securities:GPN

Summary

Global Payments Inc. (GPN) filed its 2016 10-K report, detailing a pivotal year marked by the transformative merger with Heartland Payment Systems, Inc. This strategic combination, valued at $4.4 billion, significantly expanded GPN's merchant base, direct sales force, and market reach within the United States. The company's business is broadly divided into three reportable segments: North America, Europe, and Asia-Pacific, with North America representing the largest portion of revenue. Financially, the year saw a 4.5% increase in consolidated revenues to $2.9 billion, despite an unfavorable impact from foreign currency fluctuations. However, net income attributable to Global Payments decreased slightly due to merger-related expenses, leading to diluted earnings per share of $2.04. The company managed its liquidity through a substantial increase in long-term debt to finance the Heartland acquisition and demonstrated a commitment to shareholder returns through share repurchases. The filing also highlighted the company's ongoing efforts to innovate in payment technology, focusing on integrated solutions, e-commerce, and mobile payments to navigate a competitive and rapidly evolving industry landscape.

Financial Highlights

50 data points
Beta

Revenue

$2.90B

60.4% Gross Margin

Net Income

$271.67M

9.4% Net Margin

EPS (Diluted)

$2.04

Total Assets

$10.66B

Cash & Equivalents

$1.16B

Free Cash Flow

$592.89M

Financial Statements
Beta
Revenue$2.90B
Cost of Revenue$1.15B
Gross Profit$1.75B
SG&A Expenses$1.33B
Operating Expenses$2.47B
Operating Income$424.94M
Interest Expense$67.90M
Net Income$271.67M
EPS (Basic)$2.05
EPS (Diluted)$2.04
Shares Outstanding (Basic)132.28M
Shares Outstanding (Diluted)133.17M

Key Highlights

  • 1Completed the $4.4 billion merger with Heartland Payment Systems in April 2016, significantly expanding its U.S. merchant base and direct sales force.
  • 2Consolidated revenues grew by 4.5% to $2.9 billion for fiscal year 2016, driven by growth across all operating segments.
  • 3Net income attributable to Global Payments was $271.7 million, a slight decrease from the prior year, impacted by $51.3 million in merger-related expenses.
  • 4Diluted earnings per share stood at $2.04, compared to $2.06 in the prior year.
  • 5Secured up to $4.78 billion in secured financing to support the Heartland acquisition and related costs.
  • 6The company actively repurchased shares, spending $135.9 million during the fiscal year.
  • 7Global Payments operates in three key segments: North America (70.8% of revenue), Europe (21.8%), and Asia-Pacific (7.4%), indicating a strong North American focus.

Frequently Asked Questions

The most significant event was the completion of the $4.4 billion merger with Heartland Payment Systems, Inc. in April 2016. This strategic move aimed to significantly expand the company's market presence and capabilities, particularly in the United States.

The merger led to increased revenues due to the addition of Heartland's operations, with consolidated revenues growing by 4.5%. However, the merger also incurred significant expenses ($51.3 million), which reduced net income attributable to Global Payments compared to the prior fiscal year. Diluted earnings per share was $2.04.

The company operates in three segments: North America, which accounted for approximately 70.8% of total consolidated revenues in fiscal year 2016; Europe, representing 21.8%; and Asia-Pacific, accounting for 7.4%.

Global Payments secured up to $4.78 billion in secured financing to fund the Heartland acquisition, repay existing debt, and cover merger-related costs. The company also continued its share repurchase program, indicating a focus on returning value to shareholders.