Heartland Payment Systems Fourth Quarter Net Income Up 20%, Diluted Earnings per Share Up 14%.

Quarterly Dividend Doubled

PRINCETON, N.J. -- Heartland Payment Systems, Inc. (NYSE:HPY), the nation's sixth largest provider of merchant acquiring services, today announced a 20% increase in fourth quarter net income to $6.6 million compared to net income of $5.5 million in the fourth quarter of 2005. For the three months ended December 31, 2006, the Company reported earnings of $0.16 per fully diluted share, an increase of 14% compared to earnings of $0.14 per fully diluted share in the year ago quarter. Net income in the fourth quarter of 2006 includes a pre-tax charge of $1.5 million, or $0.03 per diluted share, for the write off of purchased software. Excluding this charge, net income for the fourth quarter of 2006 would have been $7.5 million, or $0.19 per fully diluted share, increases of 37% and 36%, respectively, compared to the fourth quarter of 2005.

The Company's revenue in the quarter rose 27% to $288 million from $227 million in the year earlier period, driving a 25% increase in operating income. The operating margin for the fourth quarter fell to 17.9% of net revenues (defined as total revenues less interchange and dues and assessments), reflecting both seasonal weakness and certain one-time costs associated with the conversion of virtually all of the Company's card merchant portfolio onto its proprietary back end technology.

Robert Carr, Chairman and CEO, said, "We ended the year with another quarter of strong growth among our key metrics, and achieved a better than 40% growth rate in earnings for the year. Among the many significant new milestones surpassed, this second biggest quarter in Company history lifted our total revenues for the year over $1 billion for the first time. Early in December, we had our first $1 billion processing week and, recently, the success of our unique sales force, which we grew by over 30% in 2006, was recognized by a leading sales professional publication. While the operating margin in the quarter was dampened somewhat by incremental costs arising from our "Passport" implementation, we are excited by the significant competitive advantages we have created through the development of our proprietary front- and back-end technology platforms. In the fourth quarter, almost 80% of new card merchants installed and 70% of total transactions processed were on HPS Exchange, helping drive down processing and servicing costs to their lowest relative level this year."

Processing volume for the three months ended December 31, 2006 increased 25% to $11.4 billion from $9.1 billion during the same period in 2005, even though same store sales at our installed base rose only 2.2%, well below the Company's historical experience. The Company's active merchant count rose to 137,400 at December 31, 2006, a 21% increase over the past twelve months, comprised of 133,200 card processing and 4,200 payroll customers.

FULL YEAR RESULTS

For the full year 2006, revenues were $1.1 billion, up 31% compared to $835 million for fiscal 2005. Net income for 2006 was $28.5 million, or $0.71 per fully diluted share, increases of 49% and 42%, respectively, compared to net income of $19.1 million, or $0.50 per fully diluted share, in 2005. Earnings per share in 2006 are based on a 5% increase in the average diluted share count compared to fiscal 2005. Net income in 2006 includes a net pre-tax charge of $0.7 million, or $0.01 per diluted share, in other, non-operating income. Net income in 2005 includes a net pre-tax benefit of $2.2 million, or $0.02 per diluted share, from other, non-operating income.

Mr. Carr continued, "We are entering 2007 having established a solid foundation for growth. We have a record number of installed merchants processing on one of the industry's most robust technology platforms. We have expanded our sales organization to over 1,379 sales professionals, including 223 servicing managers at December 31, 2006, to capitalize on the strong growth opportunities with small and mid-sized merchants. Since much of the growth in our sales force occurred in the second half of the year, we expect to see their contribution steadily improve this year. And, with our strong cash flow, we have the financial resources to support the rapid expansion we have consistently generated, including the expansion of our customer service infrastructure. By offering merchants transparent pricing, personalized service, and the new products and end-to-end processing our advanced technology investments can offer, we believe that we can sustain Heartland as the processor of choice in our markets."

FULL YEAR 2007 GUIDANCE:

The Company is establishing guidance for fiscal 2007. For the year, we expect net revenue (total revenues less interchange, dues and assessments) to grow by 21% - 23%; operating income as a percentage of net revenue to be 19% - 21%; a tax rate of 37.2%; and earnings per share of $1.00 - $1.05, which excludes $0.04 per share of after-tax SFAS No. 123R stock-based compensation expense currently anticipated for fiscal 2007. Additionally, the Company announced that for the first quarter of 2007, it anticipates delivering earnings per share in the range of $0.16- $0.18. Beyond the first quarter of 2007, Heartland does not anticipate providing further quarterly earnings per share guidance.

BOARD DOUBLES QUARTERLY DIVIDEND

The Company also announced that the Board of Directors has doubled the quarterly dividend to $0.05 per common share. The dividend is payable to shareholders of record on February 23, 2007 and will be paid on March 15, 2007.

Conference Call:

Heartland Payment Systems, Inc. will host a conference call on February 15, 2007 at 8:30 a.m. Eastern Time to discuss financial results and business highlights. The conference call may be accessed by calling [phone] at 8:25AM Eastern time on February 15, 2007. Please provide the operator with PIN number 8385703. The conference call will also be Web cast where it can be accessed on the investor relations portion of Heartland's website at www.heartlandpaymentsystems.com.

A taped replay of the conference call will be available within two hours of the conclusion of the call and will remain available through Thursday, March 15, 2007. The number to call for the taped replay is 973-341-3080 and the conference PIN 8385703. The webcast will also be archived within two hours of the live call on the investor relations portion of the Company's website.

About Heartland

Heartland Payment Systems, Inc. (HPS), a NYSE company trading under the symbol HPY, delivers credit/debit card processing and payroll solutions to over 137,000 small to medium-sized merchants throughout the United States. HPS also provides additional services to its merchants such as gift and loyalty card programs, paper check authorization, and sells and rents point-of-sale devices and supplies.

With over 1,350 sales and servicing professionals nationwide, HPS builds long-term business relationships in local sales territories, providing merchants with enhanced technology tools that assist them in more effectively operating their businesses.

Heartland processed its first transaction in 1997, and, since 2000, has grown at a compound annual rate of more than 30% to become the sixth largest merchant processor in the United States and fifteenth largest merchant processor in the world.

http://www.heartlandpaymentsystems.com

Forward-looking Statements:

This press release may contain statements of a forward-looking nature which represent our management's beliefs and assumptions concerning future events. Forward-looking statements involve risks, uncertainties and assumptions and are based on information currently available to us. Actual results may differ materially from those expressed in the forward-looking statements due to many factors. Information concerning these factors is contained in the Company's Securities and Exchange Commission filings. We undertake no obligation to update any forward-looking statements to reflect events or circumstances that may arise after the date of this release.

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