BA Merchant Services, Inc. 1998 Second Quarter Earnings.SAN FRANCISCO--(BUSINESS WIRE)--Aug. 4, 1998--BA Merchant Services Merchant services is the name given in the United States to a broad category of financial services intended for use by businesses. In its most specific use, it usually refers to the service that enables a business to accept a transaction payment by use of the customer's credit or , Inc. (NYSE NYSE See: New York Stock Exchange :BPI (Bits Per Inch) The measurement of the number of bits stored in one linear inch of a track (storage channel) on a disk or tape. Bit density on magnetic disks has reached 800,000 bpi (800 Kbpi). See tpi, areal density and magnetic disk. BPI - bits per inch ) (BAMS BAMS, n.pr See Bachelor of Ayurvedic Medicine and Surgery. ) reported second quarter 1998 diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of of $.19, compared to diluted earnings per share of $.19 for the comparable quarter in 1997. Net income for the second quarter of 1998 was $9.2 million, compared to net income of $9.1 million for the comparable quarter of 1997. The operating results for 1997 include the historical results of operations for the Taiwan Taiwan (tī`wän`), Portuguese Formosa, officially Republic of China, island nation (2005 est. pop. 22,894,000), 13,885 sq mi (35,961 sq km), in the Pacific Ocean, separated from the mainland of S China by the 100-mi-wide (161-km) Taiwan , Philippines Philippines officially Republic of the Philippines Island country, western Pacific Ocean, on an archipelago off the southeast coast of Asia. Area: 122,121 sq mi (316,294 sq km). Population (2005 est.): 84,191,000. and Thailand Thailand (tī`lănd, –lənd), Thai Prathet Thai [land of the free], officially Kingdom of Thailand, constitutional monarchy (2005 est. pop. 65,444,000), 198,455 sq mi (514,000 sq km), Southeast Asia. merchant processing businesses acquired from BankAmerica Corporation (BAC BAC abbr. blood alcohol concentration ) in the second and third quarters of 1997. Included in second quarter 1998 net income were after tax charges of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $800,000 or $.02 per share due to a loss on one merchant and increased losses and reserves related to higher than usual backlogs in chargeback Chargeback The charge a credit card merchant pays to a customer after the customer successfully disputes an item on his or her credit card statement. Notes: Customers dispute charges to their credit card usually when goods or services are not delivered within the processing which have since been resolved. Exclusive of these charges, net income in the second quarter 1998 would have been $10.0 million or diluted earnings per share of $.21. "Business trends continue very strong, particularly in our domestic business. Total sales volume processed was up 25 percent and domestic net revenue increased 20 percent, year over year," said Sharif sha·rif n. Variant of sherif. Bayyari, president and chief executive officer of BAMS. Highlights in the second quarter include: -0-
-- Domestic net revenue increased 20 percent for the second quarter
and for the first six months of 1998, over comparable periods of
1997.
-- Net revenue in Asia was down 32 percent, similar to trends
experienced in the first quarter of 1998.
-- As previously reported, BAMS has been selected by BAC and
NationsBank Corporation to be the merchant services provider for
the combined organization following their merger. The merger is
subject to regulatory and shareholder approval.
-- BAMS concluded an agreement to invest in a joint venture with
First Data Financial Services and Global Cash Access to provide
cash advance and other services to gaming businesses. The
investment will provide BAMS a minority interest in the joint
venture. BAMS participation in the joint venture is subject to
regulatory approval.
-0- "We are excited about the opportunities presented by our joint venture in the gaming industry as well as our partnership with NationsBank NationsBank was one of the largest banking corporations in the United States, based in Charlotte, North Carolina. In 1998, it acquired BankAmerica to become Bank of America. . These will significantly increase our ability to market our services both to gaming businesses and profitable small and middle market merchants nationwide," Bayyari said. Total net revenue of $45.2 million for the second quarter of 1998 increased 16 percent over net revenue of $38.9 million for the same period in 1997. Total sales volume processed in second quarter 1998 of $10.0 billion increased 25 percent above the same period last year. On the same comparative basis, total operating expense Operating Expense The essential things that a company must purchase in order to maintain business. Notes: For example, the payment of employees wages are an operating expense. Also known as OPEX. increased 23 percent, including increased salaries and employee expenses that resulted from continued investment in sales and customer service staff. General and administration expenses increased primarily as a result of the loss-related charges. Depreciation expense increased 33 percent from second quarter 1997, including costs related to increased point of sale device deployments. BAMS reported net income of $17.9 million for the first six months of 1998 compared to net income of $16.8 million for the same period last year. Diluted earnings per share of $.37 for the 1998 six month period increased 6 percent over the $.35 diluted earnings per share as reported for the first six months of 1997. Net revenue of $87.1 million on sales volume processed of $19.1 billion for the first six months of 1998 increased 16 percent and 26 percent, respectively, over net revenue of $74.9 million on sales volume processed of $15.2 billion for the same period in 1997. On the same comparative basis, total operating expense increased 21 percent. BAMS provides an array of payment processing and related information products and services to merchants who accept credit, charge, and debit cards debit card, card that allows the cost of goods or services that are purchased to be deducted directly from the purchaser's checking account. They can also be used at automated teller machines for withdrawing cash from the user's checking account. as payment for goods and services In economics, economic output is divided into physical goods and intangible services. Consumption of goods and services is assumed to produce utility (unless the "good" is a "bad"). It is often used when referring to a Goods and Services Tax. . BAMS is the exclusive provider of merchant processing services for Bank of America
Bank of America (NYSE: BAC TYO: 8648 ) is the largest commercial bank in the United States in terms of deposits, and the largest company of its kind in the world. . According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. industry sources, BAMS is the fourth largest processor of merchant credit transactions and one of the largest processors of debit card transactions in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. conveying con·vey tr.v. con·veyed, con·vey·ing, con·veys 1. To take or carry from one place to another; transport. 2. management's expectations as to the future. These forward-looking statements include, but are not limited to, management's expectations of opportunities arising from the joint venture with First Data Financial Services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. and Global Cash Access to provide cash advance and other services to the gaming business and to BAMS' selection as the merchant services provider for the combined BAC and NationsBank organization. These statements are subject to uncertainties that may cause actual results to differ materially, including, but not limited to, failure to obtain necessary regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. approval or the failure of BAC and NationsBank to complete their merger, as well as those uncertainties discussed in "Forward-Looking Statements" in BAMS' most recent report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. . Investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made. -0-
BA Merchant Services, Inc.
Financial Highlights
Table 1
Quarterly Summary of Results and Statistical Data
Three Months Ended Six Months Ended
June 30, June 30,
1998 1997(1) 1998 1997(1)
($ in 000's,
except per share data)
1. Net revenue $ 45,239 $ 38,882 $ 87,073 $ 74,851
2. Income from operations $ 13,736 $ 13,303 $ 26,634 $ 24,912
3. Net income $ 9,225 $ 9,111 $ 17,924 $ 16,816
4. Operating margin(2) 30.4% 34.2% 30.6% 33.3%
5. Diluted earnings
per share(3) $ .19 $ .19 $ .37 $ .35
6. Total transactions processed
(amounts in 000's) 169,984 126,217 324,971 233,234
7. Total sales volume processed
($ in millions) $ 10,013 $ 8,022 $ 19,129 $ 15,227
N/A Not applicable
(1) Amounts for the 1997 periods include the historical results of
operations for the Thailand, Philippines and Taiwan merchant
processing businesses acquired from BankAmerica Corporation. The
acquisition of these entities has been accounted for as a
reorganization of entities under common control.
(2) Pre-tax income from operations as a percent of net revenue.
(3) Three Months Six Months
Ended Ended
June 30, June 30,
(amounts in 000's) 1998 1997 1998 1997
Weighted average number of common
shares outstanding 48,664 48,639 48,662 48,637
Weighted average number of common
shares and common stock
equivalents outstanding 48,794 48,699 48,803 48,699
Basic earnings per share amounts are the same as reported diluted
earnings per share amounts.
BA Merchant Services, Inc.
Table 2
Statement of Operations
Three Months Ended
June 30, Increase/(Decrease)
($ in 000's) 1998 1997 Amount Percent
1. Net revenue $45,239 $38,882 $ 6,357 16%
Operating expense:
2. Data processing and
communications 9,629 8,315 1,314 16%
3. Salaries and employee benefits 10,464 8,447 2,017 24%
4. General and administrative 7,324 5,977 1,347 23%
5. Depreciation 3,642 2,732 910 33%
6. Amortization of intangibles 444 108 336 311%
7. Total operating expense 31,503 25,579 5,924 23%
8. Income from operations 13,736 13,303 433 3%
9. Net interest income 1,900 2,228 (328) (15%)
10. Income before income taxes 15,636 15,531 105 1%
11. Provision for income taxes 6,411 6,420 (9) (0%)
12. Net income $ 9,225 $ 9,111 $ 114 1%
BA Merchant Services, Inc.
Table 2.1
Statement of Operations
Six Months Ended
June 30, Increase/(Decrease)
($ in 000's) 1998 1997 Amount Percent
1. Net revenue $87,073 $74,851 $12,222 16%
Operating expense:
2. Data processing and
communications 18,878 15,983 2,895 18%
3. Salaries and employee benefits 19,915 16,506 3,409 21%
4. General and administrative 13,567 12,216 1,351 11%
5. Depreciation 7,191 5,013 2,178 43%
6. Amortization of intangibles 888 221 667 302%
7. Total operating expense 60,439 49,939 10,500 21%
8. Income from operations 26,634 24,912 1,722 7%
9. Net interest income 3,746 3,752 (6) (0%)
10. Income before income taxes 30,380 28,664 1,716 6%
11. Provision for income taxes 12,456 11,848 608 5%
12. Net income $17,924 $16,816 $ 1,108 7%
BA Merchant Services, Inc.
Table 3
Balance Sheet
June 30, December 31,
($ in 000's) 1998 1997
ASSETS
Current assets:
1. Cash and cash equivalents $ 75,262 $ 29,426
2. Short-term investments 48,494 64,018
3. Drafts in transit 101,708 106,463
4. Accounts receivable 65,350 63,461
5. Other current assets 7,691 11,533
6. Total current assets 298,505 274,901
7. Property and equipment, net 29,683 27,762
8. Other assets 22,625 25,422
9. Total assets $ 350,813 $ 328,085
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
10. Accounts payable $ 260 $ 32
11. Merchants payable 8,574 8,058
12. Accrued liabilities 11,221 6,050
13. Accrued credit card
association and interchange fees 8,449 9,192
14. Income taxes payable 4,657 3,459
15. Other current liabilities 7,611 9,225
16. Total current liabilities 40,772 36,016
17. Other liabilities 841 816
18. Total liabilities 41,613 36,832
Stockholders' equity:
19. Common stock 486 486
20. Additional paid-in capital 252,693 252,479
21. Retained earnings 56,204 38,280
22. Accumulated foreign currency
translation adjustments (183) 8
23. Total stockholders' equity 309,200 291,253
24. Total liabilities &
stockholders' equity $ 350,813 $ 328,085
CONTACT: BA Merchant Services BA Merchant Services, LLC is a wholly owned subsidiary of Bank of America specializing in handling credit, debit, stored value, and electronic benefits transfer (EBT) card transactions. Betty Bet´ty n. 1. A short bar used by thieves to wrench doors open. The powerful betty, or the artful picklock. - Arbuthnot. 2. Riess, 415/622-6397 (Media Contact) Vince Barella, 415/241-7732 (Investor Contact) |
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