Fiserv Reports Record Earnings During Third Quarter of 2001
Fiserv Reports Record Earnings During Third Quarter of 2001
October 22, 2001
For the three-month period ended September 30, 2001, Fiserv revenues were $467 million, a 15% increase over the $406 million reported for the third quarter of 2000. Net income per share-diluted (excluding realized gains from sale of investment) for the third quarter of 2001 was $0.27 per share, compared to $0.22 per share for the third quarter of 2000.
For the nine-month period ended September 30, 2001, Fiserv revenues were $1,394 million, a 14% increase over the $1,219 million reported for the first nine months of 2000. Net income per share-diluted (excluding realized gains from sale of investment) for the first nine months of 2001 was $0.80 per share, compared to $0.68 per share for the first nine months of 2000.
Net income per share for all periods has been retroactively adjusted to reflect a 3-for-2 stock split effective in August 2001.
"Fiserv continues to see strong growth in earnings despite recent events affecting our economy as a whole. Our stable client base, comprehensive financial solution offerings and focus on advanced technology continue to be the foundation that supports our future growth," said Leslie M. Muma, President and CEO of Fiserv, Inc. "As in the first half of the year, Fiserv reported record earnings in the third quarter of 2001. We experienced continuing strength 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 $1.07 (split-adjusted), excluding any realized gains from sale of investment. This is consistent with our historical EPS growth targets of 18% - 20% per year.
Among significant new client relationships during the third quarter, Fiserv Securities, Inc. signed a multi-million-dollar, multi-year agreement to provide clearing and execution services for Sands Brothers & Co., Ltd., an investment firm with more than $2 billion in assets. KeyCorp, one of the nation's largest multi-line financial services companies, selected Remarketing Services of America, Inc. (RSA) to proactively manage a portion of lease maturities in the bank's vehicle portfolio. Fiserv Advanced Insurance Solutions gained two major new clients--W.R. Berkley Corporation and Enterprise Rent-A-Car--for its Claims Workstation system. W.R. Berkley also licensed the Fiserv AIS Policy STAR(TM) system.
Fiserv announced several acquisitions during the third quarter: EPSIIA Corporation, Catapult Technology Limited and the item processing operations of the Federal Home Loan Bank of Pittsburgh.
EPSIIA Corporation (formerly PSI Technologies) is a provider of large-scale electronic archival, retrieval and presentment solutions. Based in Austin, Texas, with additional operations in Columbus, Georgia, as well as the United Kingdom, Canada, Argentina, Chile and Brazil, the company has more than 100 employees and serves approximately 300 clients within the financial services, insurance, retail, telecommunications, utilities and manufacturing industries. Catapult Technology Limited is a London-based provider of private banking, treasury management and international banking technology solutions and services. The company has a strong reputation in the European market, and brings a suite of solutions that complements the offerings of the Fiserv CBS Worldwide division. The item processing operations of FHLB Pittsburgh are located in Pittsburgh and Philadelphia. These operations provide a full range of check and document services to approximately 120 financial institutions throughout Pennsylvania, Delaware and West Virginia, and currently process approximately 120 million items annually.
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 Nine Months Ended
September 30, September 30,
2001 2000 2001 2000
---------- ---------- ---------- ----------
Revenues $467,173 $406,189 $1,393,731 $1,219,025
---------- ---------- ---------- ----------
Cost of
revenues:
Salaries,
commissions
and payroll
related costs 227,949 198,617 673,838 586,218
Data
processing
expenses,
rentals and
telecommunication
costs 32,530 27,405 93,083 83,974
Other
operating
expenses 89,368 74,290 279,658 227,888
Depreciation
and
amortization
of property
and equipment 19,544 18,249 56,607 52,417
Amortization of
intangible
assets 8,893 8,357 26,562 31,159
Amortization
(capitalization)
of internally
generated
computer
software-net (326) 1,048 (216) 804
---------- ---------- ---------- ----------
Total cost
of revenues 377,958 327,966 1,129,532 982,460
---------- ---------- ---------- ----------
Operating
income 89,215 78,223 264,199 236,565
Interest
expense
- net (2,501) (5,295) (9,555) (17,101)
Realized gain
from sale of
investment 1,000 2,907 4,327 5,835
---------- ---------- ---------- ----------
Income before
income taxes 87,714 75,835 258,971 225,299
Income tax
provision 35,085 31,093 103,588 92,373
---------- ---------- ---------- ----------
Net income $ 52,629 $ 44,742 $155,383 $ 132,926
========== ========== ========== ==========
Net income
per share:
Basic $0.28 $0.24 $0.83 $0.72
Diluted $0.27 $0.23 $0.81 $0.70
Excluding
realized gain
from sale of
investment:
Diluted $0.27 $0.22 $0.80 $0.68
Diluted
(excluding
goodwill
amortization) $0.30 $0.25 $0.87 $0.75
Shares used in
computing net
income per
share:
Basic 186,944 185,151 186,555 184,524
Diluted 191,541 190,568 191,214 189,495
FISERV, INC. AND SUBSIDIARIES
SELECTED SEGMENT INFORMATION
(In thousands)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2001 2000 2001 2000
---------- ---------- ---------- ----------
Revenues:
Financial
institution
outsourcing,
systems
and services $393,599 $307,135 $1,128,579 $913,315
Securities
processing
and trust
services 56,963 82,672 214,612 256,846
All other and
corporate 16,611 16,382 50,540 48,864
---------- ---------- ---------- ----------
Total $467,173 $406,189 $1,393,731 $1,219,025
========== ========== ========== ==========
Operating income:
Financial
institution
outsourcing,
systems
and services $83,631 $56,893 $241,775 $166,748
Securities
processing
and trust
services 7,539 22,383 28,030 72,779
All other and
corporate (1,955) (1,053) (5,606) (2,962)
---------- ---------- ---------- ----------
Total $89,215 $78,223 $264,199 $236,565
========== ========== ========== ==========