It was clear during a conference call Tuesday that TSYS Chairman, President and Chief Executive Officer Troy Woods was somewhat elated as he reported surging revenues and profits, while also discussing the largest acquisition in his firm’s 33-year history.
“Without a doubt, this is the type of earnings call that a CEO dreams about,” Woods told Wall Street analysts gathered on the phone. “Reporting a great quarter, performing with operational excellence during the holiday shopping period, reporting a record earnings year, and from a shareholder perspective, producing a 47.8 percent total shareholder return for 2015, making TSYS the 9th-best performing stock in the S&P 500 for the year.”
The proverbial “icing on the cake,” Woods said, was Tuesday’s announcement that TSYS is acquiring merchant services specialty company TransFirst from private equity firm Vista Equity Partners. The price tag is $2.35 billion, with the deal expected to be completed in the second quarter of this year.
“This is truly a watershed event for our company, team members and shareholders, and we are all very excited about the opportunities that lie ahead,” he said.
TransFirst aside, however, it was a sweet fourth quarter and 2015 as a whole for credit-card and payments processor TSYS, which is headquartered in downtown Columbus.
The company reported a profit, or net income, of $82.8 million for the October-December quarter, up 3.7 percent from $79.8 million in the same period a year ago. Diluted earnings per share came in at 45 cents, up from 43 cents a year ago.
“We produced record-setting transactions, authorizations and volumes,” the CEO said. “Holiday authorizations on a same-client basis were up 12.7 percent in North America and 10 percent in our International segment.”
For all of 2015, the firm posted a profit of $364 million, a nearly 13 percent increase from $322.8 million in 2014. Diluted earnings per share were $1.97, up from $1.72 the year prior.
The profits came from fourth-quarter revenues of $716.8 million, a nearly 13 percent improvement from $635.1 million in the October-December timeframe a year ago.
For the full year, the company continued to push toward the $3 billion revenue mark. It finished with total 12-month revenues of $2.8 billion, 13.6 percent higher than the $2.4 billion it reported in 2014.
TSYS also said it repurchased 3 million shares of its common stock during the fourth quarter, bringing its stock buyback total to 5.2 million shares for the year. The firm paid $242.1 million to repurchase the stock.
Woods noted that factoring in the $73.7 million the company paid in dividends, the total return to shareholders was nearly $316 million, “which was in excess of 92 percent of available free cash flow for the year and an increase of 31.5 percent over 2014.”
Future financial projections issued by the card processor for 2016 include total revenues rising 4 to 6 percent, with the higher level putting it very close to $3 billion for the first time. Adjusted earnings per share, it said, should climb 4 to 7 percent, within a range of $2.56 to $2.62 per share. The guidance, the firm said, does not include any revenues or profits from TransFirst.
TSYS released its earnings report after the stock markets’ close Tuesday. In trading earlier on the New York Stock Exchange, the company’s shares jumped 77 cents, or 1.7 percent, to finish at $46 even. The stock’s 52-week trading range is $34.01 to $56.69 per share.