SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 21 , 1998
(January 21, 1998)
PAYMENTECH, INC.
(Exact Name of Registrant as Specified in Charter)
Delaware 1-14224 75-2634185
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
1601 Elm Street, Suite 800, Dallas, Texas 75201
(Address of Principal Executive Offices) (Zip Code)
214-849-2000
(Registrant's telephone number, including area code)
Item 5. Other Events
On January 21, 1998, Paymentech, Inc., a Delaware corporation
("Paymentech"), issued a press release announcing that it had sold its
share in the joint venture PHH/Paymentech during the second quarter of
fiscal 1998, which generated an after-tax gain of $3.4 million. In the
same press release, Paymentech announced its earnings and results of
operations for the second quarter of fiscal 1998. A copy of such press
release is attached as an exhibit hereto and is incorporated by
reference herein.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Not applicable
(b) Not applicable
(c) Exhibits
Ex. 99 Press Release, dated January 21, 1998, of Paymentech, Inc.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: January 21 , 1998
PAYMENTECH, INC.
(Registrant)
By: /s/ Philip E. Taken
___________________________
Name: Philip E. Taken
Title: Chief Administrative Officer and
General Counsel
EXHIBITS
Ex. 99 Press Release, dated January 21, 1998, of Paymentech, Inc.
[Paymentech logo]
Contacts:
Investors/Analysts: Jean Krone Bono, CFA
(214) 849-3750
Media: Rodney D Bell
(214) 849-3776
FOR IMMEDIATE RELEASE
PAYMENTECH REPORTS $6.7 MILLION IN EARNINGS
FOR SECOND QUARTER OF FISCAL 1998
DALLAS -- Jan. 21, 1998 -- Paymentech, Inc. (NYSE: PTI), the
nation's third largest payment processor, today reported net income of
$6.7 million, or $0.19 per share, for the second quarter of fiscal 1998.
This compared with net income of $8.4 million, or $0.26 per share, for
the second quarter of fiscal 1997. Earnings per share figures are stated
on a diluted basis.
For the six months ended Dec. 31, 1997, net income was $10.8
million, or $0.31 per share, compared with net income of $5.1 million, or
$0.16 per share, for the six months ended Dec. 31, 1996.
Included in the results for the quarter ended Dec. 31, 1997,
are two significant unusual items. The first is the sale of Paymentech's
share of the joint venture PHH/Paymentech, which generated an after-tax
gain of $3.4 million. The second item is an after-tax charge of $2.0
million for reserves established for equipment inventory and receivables.
Excluding these two unusual items, quarterly earnings before
income taxes, depreciation and amortization were $16 million, or 28.9% of
revenue.
In the December 1997 quarter, Paymentech processed
approximately $13.6 billion in bankcard sales volume, and approximately
476 million total transactions, including third-party authorization and
capture transactions. Bankcard sales volume increased approximately 22%
and total transaction volume increased approximately 39% over the
prior-year quarter.
"Paymentech is well positioned to support the growth of our
three business lines through strong cash earnings, revenue growth and a
healthy balance sheet," said Pamela H. Patsley, president and chief
executive officer. "We believe the increase to reserves further
strengthens the balance sheet."
"We remain very focused on executing our plan for greater
operational improvements. We doubled point-of-sale processing volume on
our Tampa platform, reaching new records for daily transaction activity,
and had ample capacity for additional volume.
"Paymentech sold its share of PHH/Paymentech to PHH's new
parent company," said Patsley. "Paymentech remains the exclusive issuer
of MasterCard corporate fleet cards for PHH. We will continue to market
and process corporate fleet cards, a product Paymentech helped to
pioneer. Other commercial card activity included the rollout for our
largest corporate fleet card program to date and the issuance of our
first British Airways corporate cards for new clients.
"New merchant account signings reflected success in key
vertical markets. We implemented two large regional petroleum retailers
and several national restaurant and lodging customers. We also added
direct response merchants both stateside and internationally," said
Patsley.
Paymentech, Inc., founded in 1985, provides full-service
electronic payment solutions for merchants, third-party transaction
processing, and total commercial card payment programs. Paymentech
(www.paymentech.com) is the third largest processor of bankcard
transactions in the United States and a leading issuer of commercial
cards.
Effective Dec. 31, 1997, Paymentech adopted the Financial
Accounting Standards Board Statement Number 128 which establishes
standards for computing and presenting earnings per share.
This press release may include forward-looking statements
that express expectations of future events, including future earnings.
All such statements are based on a number of assumptions and estimates
which are inherently subject to significant uncertainties and
contingencies, many of which are beyond the control of the company, and
reflect future business decisions which are subject to change. A variety
of factors could cause actual events or results to differ materially from
those projected in the company's forward-looking statements. These
factors include, but are not limited to, the factors discussed in detail
within the company's reports filed with the Securities and Exchange
Commission, including the most recent report on Form 10-K.
(See accompanying table for financial highlights.)
PAYMENTECH, INC. AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS
(In thousands, except per share data)
Three Months Ended December 31
------------------------------
1997 1996 % Change
---- ---- --------
STATEMENTS OF INCOME
Revenue $55,459 $48,301 14.8%
Other income 6,225 3,721 67.3%
------ ------
Total Revenues 61,684 52,022 18.6%
------ ------
Income before income taxes 11,640 15,289 -23.9%
Net income 6,665 8,396 -20.6%
Earnings per share - diluted 0.19 0.26 -26.9%
Earnings before significant
unusual items (1) 5,294 6,443 -17.8%
Earnings per share before
significant unusual items (1) 0.15 0.20 -25.0%
Weighted average common
shares - diluted 35,344,616 32,521,390 8.7%
BALANCE SHEET STATISTICS
Purchased merchant portfolios,
goodwill and other intangibles,
net $332,419 $306,961 8.3%
Total assets 634,323 499,561 27.0%
Stockholders' equity 378,312 333,594 13.4%
OTHER DATA
Sales volume processed $13,591,194 $11,110,050 22.3%
Total transactions processed 476,381 341,799 39.4%
Six Months Ended December 31,
-----------------------------
1997 1996 % Change
---- ---- --------
STATEMENTS OF INCOME
Revenue $105,799 $89,431 18.3%
Other income 7,426 3,974 86.9%
------- ------
Total revenues 113,225 93,405 21.2%
------- ------
Income before income taxes 19,113 9,231 107.1%
Net income 10,837 5,112 112.0%
Earnings per share - diluted 0.31 0.16 93.8%
Earnings before significant
unusual items (2) 9,116 12,833 -29.0%
Earnings per share before
significant unusual items (2) 0.26 0.40 -35.0%
Weighted average common
shares - diluted 35,360,800 32,321,229 9.4%
BALANCE SHEET STATISTICS
Purchased merchant portfolios,
goodwill and other intangibles,
net $332,419 $306,961 8.3%
Total assets 634,323 499,561 27.0%
Stockholders' equity 378,312 333,594 13.4%
OTHER DATA
Sales volume processed $24,817,699 $20,129,705 23.3%
Total transactions processed 896,142 605,415 48.0%
(1) The quarter ended December 31, 1997, excludes the effects of
significant unusual items which result in a net gain of $1,371 after
tax. The quarter ended December 31, 1996, excludes the effect of a
significant unusual gain of $1,953 after tax.
(2) The six months ended December 31, 1997, excludes the effects of
significant unusual items which result in a net gain of $1,721 after
tax. The six months ended December 31, 1996, excludes the effects of
significant unusual items which result in a net charge of $7,721
after tax.
