Fiserv Reports Record Earnings for First Quarter of 2002
Fiserv Reports Record Earnings for First Quarter of 2002
April 22, 2002
For the three-month period ended March 31, 2002, Fiserv revenues (excluding customer reimbursements) were $559.8 million, a 21% increase over the $462.2 million for the first quarter of 2001. Net income per share-diluted (excluding realized gains from sale of investment) for the first quarter of 2002 was $0.33 per share, compared to $0.26 per share for the first quarter of 2001.
Effective January 1, 2002, the Company adopted SFAS No. 142, "Goodwill and Other Intangible Assets." SFAS No. 142 requires that intangible assets with definite lives be amortized over their useful lives and that goodwill and other intangible assets with indefinite lives not be amortized but evaluated for impairment. The effect of adopting SFAS No. 142 increased diluted net income per share by approximately $0.02 for the three months ended March 31, 2002, due to the elimination of goodwill amortization.
"Fiserv had a strong first quarter in 2002, as we continue to build on the momentum of last year's performance. Our revenues increased nearly $100 million, representing the largest increase in quarterly revenues in Fiserv's history," said Leslie M. Muma, President and CEO of Fiserv, Inc. "Most of our business units performed at or above our expectations, both in terms of internal revenue growth from existing clients and new sales contracts.
"We continued to see positive growth in our Financial Institution Outsourcing, Systems and Services Segment, which accounts for approximately 85 - 90% of our total revenue. Our sales efforts for the first quarter generated more new banking, lending, securities and insurance relationships than the record numbers reported for the first quarter of 2001.
"Our estimate for full-year earnings per share for 2002 (excluding realized gains from sale of investment) continues to be $1.35 to $1.37 per share," Muma concluded.
The ability of Fiserv to deliver a full suite of automation services and products continues to provide a fertile sales environment. Major victories in the quarter included the signing of Waypoint Bank, a $5.3 billion financial services organization in Harrisburg, Pennsylvania, which chose Fiserv for the strength of its core processing product as well as the ability to deliver Internet-based cash management, a comprehensive sales and teller servicing platform, a profitability measurement tool and a complete call center system. Meritech Mortgage Services, Inc. selected the Fiserv mortgage lending platform to provide Web-based loan servicing, default servicing, workflow integration and collection technology for its vast non-conforming residential mortgage portfolio. The Fiserv automotive financial systems and services division was successful in significantly expanding its relationship with DaimlerChrysler Services North America LLC. NASCO chose Fiserv to provide document composition, laser printing, intelligent inserting and first class mailing, along with a comprehensive system to electronically deliver documents through the Web. During the quarter, Fiserv also successfully completed the installation of its integrated banking system for $6.7 billion F.N.B. Corporation of Naples, Florida.
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 13,000 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 estimates of future earnings, earnings and revenue 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
March 31,
2002 2001
------------ ------------
Revenues(1)
Processing and services $559,824 $462,163
Customer reimbursements 72,104 65,488
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Total Revenues 631,928 527,651
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Cost of revenues(1)
Salaries, commissions and payroll
related costs 271,632 222,213
Customer reimbursement expenses 72,104 65,488
Data processing costs and
equipment rentals 39,108 34,338
Other operating expenses 116,350 91,910
Depreciation and amortization 24,220 27,097
------------ ------------
Total cost of revenues 523,414 441,046
------------ ------------
Operating income 108,514 86,605
Interest expense - net (2,687) (3,817)
Realized gain from sale of investment 915 1,821
------------ ------------
Income before income taxes 106,742 84,609
Income tax provision 41,629 33,844
------------ ------------
Net income $ 65,113 $50,765
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Net income per share:
Basic $0.34 $0.27
Diluted $0.33 $0.27
Excluding realized gain
from sale of investment:
Diluted $0.33 $0.26
Diluted (excluding goodwill amortization) $0.33 $0.28
Shares used in computing net income
per share:
Basic 190,669 186,162
Diluted 195,152 190,850
(1) Effective January 1, 2002, the Company adopted Emerging Issues
Task Force Issue No. 01-14, "Income Statement Characterization of
Reimbursements Received for `Out of Pocket' Expenses Incurred" which
requires that customer reimbursements received for direct costs paid
to third parties and related expenses be characterized as revenue.
Comparative financial statements for 2001 have been reclassified to
provide consistent presentation. For the three months ended March 31,
2002 and 2001, the Company has presented customer reimbursement
revenue and expenses of $72.1 million and $65.5 million, respectively,
in accordance with Issue No. 01-14. Customer reimbursements represent
direct costs paid to third parties primarily for postage and data
communication costs. In addition, processing and services revenues and
salaries / data processing costs were increased by $8.9 million and
$8.3 million in 2002 and 2001, respectively. The adoption of Issue No.
01-14 did not impact the Company's financial position, operating
income or net income.
FISERV, INC. AND SUBSIDIARIES
SELECTED SEGMENT INFORMATION(1)
(In thousands)
(Unaudited)
Three Months Ended
March 31,
2002 2001
------------ ------------
Processing and services revenues:
Financial institution outsourcing,
systems and services $481,703 $368,723
Securities processing and trust
services 54,763 72,394
All other and corporate 23,358 21,046
------------ ------------
Total $559,824 $462,163
============ ============
Operating income:
Financial institution outsourcing,
systems and services $101,789 $79,862
Securities processing and trust
services 7,566 8,122
All other and corporate (841) (1,379)
------------ ------------
Total $108,514 $86,605
============ ============
(1) As of January 1, 2002, segment results have been restated for
the first quarter of 2001 to reflect the transfer of one business unit
representing $3.6 million in revenue and $0.3 million in operating
income from the Securities processing and trust services segment to
the Financial institution outsourcing, systems and services segment.