SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
January 11, 2000
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(Earliest Event Reported)
Total System Services, Inc.
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(Exact Name of Registrant as
Specified in its Charter)
Georgia 1-10254 58-1493818
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(State of (Commission File (IRS Employer
Incorporation) Number) Identification
Number)
1600 First Avenue, Columbus, Georgia 31901
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(Address of principal executive offices)
(706) 649-2267
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(Registrant's Telephone Number)
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(Former name or former address, if changed since last report)
<PAGE>
Item 5. Other Events.
On January 11, 2000, Total System Services, Inc. ("Registrant") announced
earnings for the year ended December 31, 1999.
A copy of Registrant's press release regarding the announcement referenced
above is attached hereto as Exhibit 99.1 and by this reference is hereby
incorporated by reference into this Form 8-K and made a part hereof.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements - None.
(b) Pro Forma Financial Information - None.
(c) Exhibits
99.1 - Registrant's press release, January 11, 2000.
2
<PAGE>
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, Registrant has caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TOTAL SYSTEM SERVICES, INC.
("Registrant")
Dated: January 11, 2000 By:/s/ Kathleen Moates
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Kathleen Moates
Deputy General Counsel
4
<PAGE>
Exhibit Index
Exhibit Number Description
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99.1 Registrant's
press release
dated January 11, 2000
5
For Immediate Release
Contact: James B. Lipham Patrick A. Reynolds
Chief Financial Officer Director of Investor Relations
(706) 649-2262 (706) 649-5220
TSYS(R) Exceeds Forecast and Reports 25.1% Increase in Net Income for 1999
Columbus, Ga., January 11, 2000 -- Total System Services, Inc.(R) (TSYS(R))
(NYSE: "TSS") today announced net income and revenues for the twelve months and
fourth quarter ended December 31, 1999. Net income for 1999 increased 25.1% to
$68.6 million, up from $54.8 million for 1998. Basic and diluted earnings per
share for 1999 increased to $.35, up from $.28 for 1998. Revenues for 1999 were
$533.9 million, an increase of 34.8%, compared with revenues of $396.2 million
for 1998.
Net income for the quarter increased 14.2% to $20.3 million, up from $17.8
million, for the same period last year. Basic and diluted earnings per share for
the fourth quarter of 1999 increased to $.10, up from $.09 for the fourth
quarter of 1998. Revenues for the fourth quarter of 1999 were $143.8 million, an
increase of 31.9%, compared with revenues of $109.0 million for the fourth
quarter of 1998. The increase in net income for the fourth quarter was limited
by the growth in expenses related to conversion expenses for Sears, Canadian
Tire, and Nordstrom; employment expenses; accelerated equipment lease expenses;
occupying the new riverfront campus; a new card production facility; and the
establishment of an international office in London.
Chairman and CEO Richard W. Ussery said, "We are delighted with the financial
results for 1999. Early in 1999, we forecast a net income increase of 20% over
1998; then, in our third quarter earnings announcement, we amended our forecast
to 23%. Because of strong fourth quarter revenues and expense control, we
delivered a solid 25.1% increase. In our third quarter 1999 announcement, we
also forecast that our net income in 2000 would grow 13 - 15% over 1999. We are
now finalizing our budgets and are forecasting a net income increase of 20% in
2000 in spite of the anticipated loss of one of our largest customers, AT&T
Universal Card Services, which will be taken in-house by Citigroup. We believe
that new contracts and new business under negotiations, once converted, will
more than offset the loss of AT&T/Citigroup revenues. TSYS reported the
seventeenth consecutive year of record net income, revenues, and earnings per
share in 1999. We anticipate another record year in 2000."
Ussery continued, "Due to our people and their dedication to our company, we
had a smooth, uneventful transition into the new millennium. Congratulations
are due to our TSYS Team 2000 and every team member that worked to ensure that
our customers were not impacted by the Y2K bug."
- more -
TSYS Announces Financial Results for 1999/Page 2
During the fourth quarter of 1999, TSYS made several significant
announcements. TSYS introduced its digital wallet solution, SureWallet SM,
another product of its SureTransact SM comprehensive suite of issuer-branded
e-commerce solutions. SureTransact leverages TSYS' twenty years experience in
electronic commerce and will enhance its e-commerce product offerings. One of
the most exciting opportunities for TSYS' growth in 2000 and beyond is in the
electronic commerce areas. We plan to be a major player in the
business-to-consumer and business-to-business arenas through product
development, alliances with Internet enabling companies and acquisitions of
specialty companies that add to our product offerings.
Also during the quarter, TSYS added three new members to the TSYS Board of
Directors: Thomas G. Cousins, Sidney E. Harris and Rebecca K. Yarbrough. Thomas
Cousins is Chairman and CEO of Cousins Properties Incorporated. Dr. Sidney
Harris is Dean of Georgia State University's J. Mack Robinson College of
Business. Rebecca Yarbrough is a private investor who has held leadership
positions with several community organizations for a number of years. During the
quarter, Synovus Financial Corp. and its subsidiaries, including TSYS, were
named #5 on FORTUNE's 100 Best Companies to Work for in America list.
TSYS is one of the world's leading processors of data and transactions for
domestic and international issuers of credit, debit, commercial and
private-label cards. TSYS' sophisticated systems offer online accounting, data
processing, electronic commerce services, portfolio management, account
acquisition, credit evaluation, risk management and customer service. With more
than 206 million accounts on file, TSYS and its family of companies service the
entire lifecycle of card accounts, making it possible for 284 million consumers
to use their cards anytime, anywhere. Headquartered in Columbus, Ga., TSYS
(www.totalsystem.com) is an 80.8 percent owned subsidiary of Synovus Financial
Corp., (NYSE: "SNV") (www.synovus.com) named one of the Best Companies to Work
for in America by FORTUNE magazine.
This press release contains statements that constitute
"forward-looking statements" within the meaning of the Securities Act of 1933
and the Securities Exchange Act of 1934 as amended by the Private Securities
Litigation Reform Act of 1995. "Forward-looking" statements contained in this
press release include the intent, belief or current expectations of TSYS and
members of its senior management team with respect to the percentage increases
in earnings of TSYS expected for the year 2000, as well as the assumptions upon
which such statements are based. Prospective investors are cautioned that any
such forward-looking statements are not guarantees of future performance and
involve risks and uncertainties, and that actual results may differ materially
from those contemplated by such forward-looking statements.
- more -
TSYS Announces Financial Results for 1999/Page 3
Important factors currently known to management that could cause actual results
to differ materially from those contemplated by the forward-looking statements
in this press release include, but are not limited to, lower than anticipated
internal growth rates for TSYS' existing customers, TSYS' inability to control
expenses associated with the growth in its number of employees, the inability of
TSYS to grow its business through acquisitions, adverse developments with
respect to entering into contracts with new clients and retaining current
clients, adverse developments with respect to the successful conversion of
clients, failure to successfully complete TSYS' Year 2000 modification plans
substantially as scheduled and budgeted, adverse developments with respect to
the credit card industry in general and overall market conditions. Additional
factors that could cause actual results to differ materially from those
contemplated in this press release can be found in TSYS' Quarterly Report on
Form 10-Q filed with the Securities and Exchange Commission on November 15,
1999.
- -- more --
TOTAL SYSTEM SERVICES, INC.
Financial Highlights
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three months ended Twelve months ended
December 31, December 31,
-------------------------------- ----------------------------------------
Percentage Percentage
1999 1998 Change 1999 1998 Change
-------- ------- --------- ------ ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
Revenues 143,796 109,005 31.9 % $ 533,926 396,194 34.8 %
Expenses 117,817 87,093 35.3 445,634 329,825 35.1
Equity in Income of
Joint Ventures 3,881 4,279 (9.3) 12,327 12,974 (5.0)
-------- -------- ------- -------
Operating Income 29,860 26,191 14.0 100,619 79,343 26.8
Other Income 870 418 nm 2,957 2,444 21.0
-------- ------- ------
Income before Income Taxes 30,730 26,609 15.5 103,576 81,787 26.6
Income Taxes 10,456 8,850 18.1 34,983 26,956 29.8
-------- ------- ------- -------
Net Income $ 20,274 17,759 14.2 $ 68,593 54,831 25.1
========= ======= ======= =======
Basic Earnings Per Share $ 0.10 0.09 13.7 $ 0.35 0.28 24.5
========= ======= ======= =======
Diluted Earnings Per Share $ 0.10 0.09 13.8 $ 0.35 0.28 24.6
========= ======= ======= =======
Dividend Declared Per Share $ 0.010 0.010 $ 0.040 0.038
========= ======= ======= =======
Average Common Shares
Outstanding 194,911,349 194,038,062 194,912,983 194,019,689
======================== ==========================
Average Common and Common
Equivalent Shares Outsta 195,365,426 194,718,158 195,478,593 194,669,451
======================== ==========================
</TABLE>
nm = not meaningful
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