Fiserv Reports Record Earnings During Second Quarter of 2001; Announces 3-for-2 Common Stock Split
Fiserv Reports Record Earnings During Second Quarter of 2001; Announces 3-for-2 Common Stock Split
July 23, 2001
For the three-month period ended June 30, 2001, Fiserv revenues were $472.6 million, a 13.5% increase over the $416.4 million reported for the second quarter of 2000. Net income per share-diluted (excluding realized gains from sale of investment) for the second quarter of 2001 was $0.40 per share, compared to $0.34 per share for the second quarter of 2000.
For the six-month period ended June 30, 2001, Fiserv revenues were $926.6 million, a 14.0% increase over the $812.8 million reported for the first six months of 2000. Net income per share-diluted (excluding realized gains from sale of investment) for the first six months of 2001 was $0.79 per share, compared to $0.68 per share for the first six months of 2000.
"During the first half of 2001, Fiserv reported strong earnings results as we continue to build on our successful history of consistent growth," said Leslie M. Muma, President and CEO of Fiserv, Inc. "Most of our business units continued to perform at or above our expectations during the first six months, both in terms of internal revenue growth from existing clients and new sales contracts. We saw very strong growth in our Financial Institution Outsourcing, Systems and Services Segment, which accounts for approximately 80% of our total revenue. This was partially offset by the decline in our Securities Processing and Trust Services Segment that had been anticipated. Our target for full-year diluted earnings per share (EPS) for 2001 continues to be $1.60 to $1.61, excluding any realized gains from sale of investment. This is consistent with our historical EPS growth targets of 18% - 20% per year.
"Sales of our traditional products remained strong with the year-to-date signing of 193 new clients and 670 cross-sell agreements, and our pipeline continues to be robust as we move into the second half of the year. Revenues associated with new contracts signed in 2001 are up more than 30% over the prior year due largely to an increase in average contract size," Muma added.
"We serve a dynamic market, where our clients are facing evolving customer needs and technology demands on a daily basis. Using our extensive resources, industry-specific expertise and advanced product suite, clients gain in Fiserv a partner who will help successfully manage the many challenges of an evolving business environment," Muma concluded.
Fiserv announced during the second quarter that it will provide the technology to support CIGNA Bank & Trust, the new federally chartered, full-service thrift formed by CIGNA Corporation. CIGNA Corporation's subsidiaries are leading providers of employee benefits. In June, Fiserv and Northern Trust announced the formation of a joint venture to provide receivables management services, commonly known as lockbox. The venture will provide receivables management services to Northern Trust for its clients, with plans to sell services to additional financial institutions. As part of the joint venture, Northern Trust also signed a long-term servicing agreement.
Subsequent to quarter end, Fiserv announced that it had acquired Austin, Texas-based EPSIIA Corporation, a provider of large-scale electronic archival, retrieval and presentment solutions. Fiserv currently provides solutions for paper-based systems, including laser printing, mailing and fulfillment of statements and other documents. As the industry continues to move toward electronic presentment and delivery, there has been a growing demand for these types of delivery options. EPSIIA provides a real-world, proven solution for Fiserv clients who are looking to complement, or possibly replace, their current paper-based systems through electronic document management services.
Fiserv announced today a 3-for-2 split in its outstanding shares of Common Stock among shareholders of record as of August 10, 2001. Distribution of new shares will be mailed on or about August 31, 2001, by the Company's transfer agent, EquiServe Trust Company, N.A. This stock split will be the Company's sixth since it went public in September 1986. Fiserv previously carried out 3-for-2 splits in April 1999, May 1998, May 1993, June 1992 and July 1991.
Fiserv, Inc. (Nasdaq: FISV) is an independent, full-service provider of integrated data processing and information management systems to the financial industry. As a leading technology resource, Fiserv serves more than 10,000 financial services providers worldwide, including banks, broker-dealers, credit unions, financial planners and investment advisers, insurance companies and agents, mortgage banks and savings institutions. Headquartered in Brookfield, Wisconsin, Fiserv also can be found on the Internet at www.fiserv.com.
The disclosure set forth above contains forward-looking statements, specifically Mr. Muma's statements regarding future earnings, earnings targets and business prospects. Such forward-looking statements are subject to inherent risks and uncertainties that may cause actual results to differ materially from those contemplated by such forward-looking statements. The factors that may cause actual results to differ materially from those contemplated by the forward-looking statements include, among others, changes in customers' demand for the Corporation's products, pricing and other actions by competitors, and general changes in economic conditions or U.S. financial markets. These factors should be considered in evaluating the forward-looking statements, and undue reliance should not be placed on such statements.
FISERV, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2001 2000 2001 2000
-------- -------- -------- --------
Revenues $472,646 $416,434 $926,558 $812,836
-------- -------- -------- --------
Cost of revenues:
Salaries,
commissions and
payroll related
costs 227,194 198,029 445,889 387,601
Data processing
expenses,
rentals and
telecommunication
costs 30,948 28,457 60,553 56,569
Other operating
expenses 97,898 78,371 190,290 153,598
Depreciation and
amortization of
property and
equipment 18,758 17,419 37,063 34,168
Amortization of
intangible assets 8,877 15,626 17,669 22,802
Amortization
(capitalization)
of internally
generated computer
software-net 592 (856) 110 (244)
-------- -------- -------- --------
Total cost of
revenues 384,267 337,046 751,574 654,494
-------- -------- -------- --------
Operating income 88,379 79,388 174,984 158,342
Interest expense
- net (3,237) (6,000) (7,054) (11,806)
Realized gain from
sale of investment 1,506 2,928 3,327 2,928
-------- -------- -------- --------
Income before
income taxes 86,648 76,316 171,257 149,464
Income tax provision 34,659 31,289 68,503 61,280
-------- -------- -------- --------
Net income $ 51,989 $ 45,027 $102,754 $ 88,184
======== ======== ======== ========
Net income per share:
Basic $0.42 $0.37 $0.83 $0.72
Diluted $0.41 $0.36 $0.81 $0.70
Excluding realized
gain from sale of
investment:
Diluted $0.40 $0.34 $0.79 $0.68
Diluted
(excluding
goodwill
amortization) $0.44 $0.38 $0.87 $0.75
Shares used in
computing net
income per share:
Basic 124,372 122,991 124,240 122,807
Diluted 127,501 126,401 127,367 125,972
FISERV, INC. AND SUBSIDIARIES
SELECTED SEGMENT INFORMATION
(In thousands)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2001 2000 2001 2000
-------- -------- -------- --------
Revenues:
Financial
institution
outsourcing,
systems and
services $374,618 $313,092 $734,980 $606,180
Securities
processing and
trust services(1) 81,627 87,727 157,649 174,174
All other and
corporate 16,401 15,615 33,929 32,482
-------- -------- -------- --------
Total $472,646 $416,434 $926,558 $812,836
======== ======== ======== ========
Operating income:
Financial institution
outsourcing, systems
and services $78,548 $60,519 $158,144 $109,855
Securities processing
and trust
services(1) (2) 12,103 20,449 20,491 50,396
All other and
corporate (2,272) (1,580) (3,651) (1,909)
-------- -------- -------- --------
Total $88,379 $79,388 $174,984 $158,342
======== ======== ======== ========
(1) Includes a $12.0 million termination fee received by the
Company in the second quarter of 2001 from a broker-dealer
customer recently acquired by a third party.
(2) Includes a $12.3 million charge recorded in the second quarter
of 2001 related to the planned consolidation of the Company's
securities processing businesses.