TSYS is fast putting the hard times from the U.S. economic downturn in its rearview mirror, Chairman and Chief Executive Officer Phil Tomlinson told those gathered today at the company’s annual shareholder meeting.
“We’re very proud of 2011,” he said. “We had a couple of lean years there and we’re not used to lean years. We told you that we would be back and I think we are.”
Tomlinson, speaking inside the company’s auditorium at its global headquarters in downtown Columbus, ticked off several key financial accomplishments in laying out his belief that the credit-card and electronic payment processor is on solid footing and growing stronger by the quarter.
The firm racked up a profit of $220.5 million on total revenue of $1.8 billion in 2011, increases of 13.7 percent and 5.3 percent, respectively, from the prior year. “Worth noting is our chief performance metrics improved every quarter in 2011,” Tomlinson said. “Our team did a great job of managing expenses and staying focused on the business operations, as well as meeting the clients’ needs. This was hard to do during the recession because there was an awful lot of negativity floating around.”
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The CEO also pointed out that the company’s stock fared well last year, hitting a new 52-week high 14 times. That has carried over into this year, with shares hitting a 52-week high 14 times in the first quarter alone.
“We are outpacing the Dow, the Nasdaq, the Russell 1,000 and the S&P 500 for 2012,” he said, pausing, then drawing laughter with his quip, “I really thought y’all would get more excited about that.”
TSYS is becoming much more diverse in its geographic footprint and business segments. The company, which once derived 93 percent of its revenue from North America, now brings in about 52 percent from that continent. Another 24 percent comes from its International operations, including Europe, Latin America and the Asia-Pacific region. Merchant services — outfitting businesses with equipment and handling transactions — makes up 24 percent of revenue.
“Another great signal of the rising consumer confidence is the fact that cardholder transactions in the first quarter increased almost 17 percent,” said the CEO of the company that handles 38 million card and electronic payment transactions each day.
There also were several new clients signed and contracts renewed for processing, licensing the company’s software and other services last year and into the first quarter of this year, Tomlinson said. Those clients included Huntington Bancshares, Regions Bank, M&T Bank, Tinkoff Credit in Russia, Habib Bank in Pakistan and The Royal Bank of Scotland, which extended its contract another 13 years.
“They are our original European client. They really are a cornerstone of our international business,” he said of Royal Bank of Scotland, while also mentioning that retailer Carrefour had also completed its conversion to the TSYS processing system in Brazil. Carrefour is second only to Walmart in the global retail sector.
All of that new and extended business adds up to TSYS projecting earnings per share will grow 10 to 12 percent this year, harkening back to the pre-recession days when double-digit growth was the norm.
Tomlinson said it doesn’t stop there, however, and he drew a line today between discussing the past and the future.
“It’s great to talk about 2011, but it’s done,” he said. “It’s great to talk about the first quarter of 2012. We’re very happy with it, but it’s done. We have to worry about the future and I think our future looks very bright here at TSYS.”
Tomlinson lauded the company’s 8,300 staffers worldwide for their “strength and unselfishness” in getting to this point in the company’s rebound. More than 4,000 of those earn a paycheck here in Columbus.
“They’ve all sacrificed,” he said. “We’re leaner, meaner and more resilient as a result of going through that recession. We’re doing more with less.”
That experience will serve the card processor well as it goes about living up to the new slogan — “People-Centered Payments” — that it unveiled in February, the CEO said. That equates to being easier to do business with, adopting a can-do attitude, and being even more proactive in finding ways to assist clients with their needs and solve any problems.
“Our client base has been through some very difficult times and they’re starting to catch their breath now and wanting to grow their revenue base, and cards are a wonderful way to grow it,” he said.
After the meeting, longtime TSYS shareholders William Meeks and Johnny Davis said they were happy with the company, its performance and the dividends it pays. Those dividends were up 42 percent last year from 2010.
“I think it’s great,” AT&T retiree Meeks said of TSYS before chuckling when asked if anything worries him. “As a stockholder, you’re always worried.”
Both Columbus residents invest in local companies such as TSYS, Aflac and Synovus, although Davis pointed out the latter, a regional bank, has been tough to stick with.
“They’re going through some tough times due to the economy. But it’s good to see profits again,” he said.“Give ’em some time,” Meeks said of Synovus, which spun off TSYS as its own company at the end of 2007. “It will take a while, but they’ll come back.”