(Source: PRNewswire)

JACKSONVILLE, Fla., July 28 /PRNewswire-FirstCall/ -- Fidelity National Information Services, Inc. (NYSE: FIS), a leading global provider of technology services to financial institutions, today reported financial results for the quarter ended June 30, 2009.
Consolidated revenue of $834.8 million declined 4.0% in U.S. dollars and 0.4% in constant currency compared to $869.7 million in the second quarter of 2008. Non-GAAP adjusted net earnings increased 23.5% to $0.42 per share in U.S. dollars, compared to $0.34 in the prior year, and increased 26.5% in constant currency. The increase is due to improved operating performance across all major business lines and lower net interest expense. GAAP net earnings from continuing operations attributable to common stockholders totaled $59.6 million, or $0.31 per share, compared to $0.07 per share in the prior period. Free cash flow (cash from operations less capital expenditures) was $124.6 million compared with $86.0 million in the prior year quarter.
"FIS reported another quarter of excellent growth in earnings, margin expansion and strong free cash flow. Our management team has done an excellent job navigating through the current difficult market conditions, and in further strengthening FIS's position as a premier global organization," stated William P. Foley, II, executive chairman. "Importantly, despite the difficult market environment, we remain highly focused on expanding customer relationships, and we continue to pursue growth opportunities that leverage our existing operations and drive long-term value for our shareholders."
"We are very pleased with our strong second quarter performance, which included a 250 basis point improvement in margin and once again, outstanding free cash flow. The strategic initiatives implemented over the last several quarters are producing tangible results, and we remain confident in our ability to continue to generate strong operating efficiencies and leverage," added Lee A. Kennedy, president and chief executive officer. "Based on results to date and our outlook for the remainder of 2009, we are increasing our full year earnings outlook to $1.71 to $1.75 per share from our previous guidance of $1.60 to $1.66 per share."
Supplemental Information
Consolidated revenue in the second quarter of 2009 was $834.8 million, compared with $869.7 in the prior year quarter, a decrease of 4.0% in U.S. dollars. Excluding a $31.2 million unfavorable impact of foreign currency resulting from a strengthening of the U.S. dollar, consolidated revenue declined 0.4%.
- Financial Solutions revenue declined 1.4% to $277.0 million compared to $280.8 million in the prior period, as increased demand for risk management and technology outsourcing services was offset by lower software license and professional services revenue.
- Payment Solutions revenue declined 0.9% to $380.0 million compared to $383.4 million in the 2008 quarter, as growth in debit was offset by declines in item processing, credit card and retail check services.
- International revenue declined 13.7% to $178.4 million in U.S. dollars, compared to $206.8 million in the prior year quarter. The decline was driven by the strengthening of the U.S. dollar and exceptionally strong revenue in the second quarter of 2008. International revenue increased 1.4% in constant currency, driven by 5.1% growth in payments. Financial solutions revenue declined 4.3% due to a reduction in license and professional services revenue related to significant new customer implementations in the second quarter of 2008.
Adjusted EBITDA increased 6.9% to $211.6 million in the second quarter of 2009 compared to $198.0 million in the 2008 quarter. The adjusted EBITDA margin improved 250 basis points to 25.3% compared to 22.8% in the prior-year quarter, driven by increased operating leverage and ongoing expense management across all operating segments.
- Financial Solutions EBITDA increased 15.0% to $119.4 million, and the margin improved 610 basis points to 43.1% compared to 37.0% in the prior year.
- Payment Solutions EBITDA increased 8.2% to $105.2 million, and the margin increased 230 basis points to 27.7%.
- International EBITDA increased 29.4% to $29.5 million. Productivity improvements more than offset a decline in high margin software sales and a $6.5 million unfavorable currency impact. The EBITDA margin improved 550 basis points to 16.5% compared to 11.0% in the prior year.
The effective tax rate in the second quarter of 2009 was 34.5% compared to 32.0% in the second quarter of 2008.
Balance Sheet
FIS had $227.9 million in cash and cash equivalents at June 30, 2009. The company repaid $168.4 million of debt during the second quarter, reducing total debt outstanding to $2.3 billion, of which $2.1 billion has been swapped to fixed interest rates. The effective interest rate was 5.5% as of June 30, 2009.
Capital expenditures totaled $50.9 million in the quarter, compared to $52.0 million spent in the prior year.
Acquisition Update
On April 1, 2009, FIS announced plans to acquire Metavante Technologies, Inc. (NYSE:MV). FIS expects to complete the transaction in the fourth quarter of 2009, subject to shareholder and regulatory approvals and the satisfaction of customary closing conditions.
2009 Outlook
Based on FIS's results in the first six months and the outlook for the remainder of the year, management expects to achieve adjusted net earnings of $1.71 to $1.75 per share in 2009, compared to the previous guidance of $1.60 to $1.66 per share. The company expects constant currency revenue to increase modestly in 2009 compared to 2008, and expects reported revenue to decline slightly compared to 2008. Free cash flow is expected to exceed the high end of management's previous guidance of $410 million to $430 million. This guidance does not include Metavante's operating results. FIS will update its fiscal 2009 guidance to include Metavante following the completion of the transaction.
Use of Non-GAAP Financial Information
Generally Accepted Accounting Principles (GAAP) is the term used to refer to the standard framework of guidelines for financial accounting. GAAP includes the standards, conventions, and rules accountants follow in recording and summarizing transactions, and in the preparation of financial statements. In addition to reporting financial results in accordance with GAAP, the company has provided non-GAAP financial measures which it believes are useful to help investors better understand its financial performance, competitive position and prospects for the future. These non-GAAP measures include earnings before interest, taxes and amortization (EBITDA), adjusted net earnings, and free cash flow. Adjusted EBITDA excludes the impact of merger and acquisition and integration expenses, LPS spin-off related costs, certain stock compensation charges and certain other costs. Adjusted net earnings exclude the after-tax impact of merger and acquisition and integration expenses, LPS spin- off related costs, certain stock compensation charges, acquisition related amortization and certain other costs. Any non-GAAP measures should be considered in context with the GAAP financial presentation and should not be considered in isolation or as a substitute for GAAP net earnings. Further, FIS's non-GAAP measures may be calculated differently from similarly-titled measures of other companies. A reconciliation of these non-GAAP measures to related GAAP measures is included in the press release attachments.
Conference Call and Webcast
FIS will host a call with investors and analysts to discuss second quarter 2009 results on Tuesday, July 28, 2009, beginning at 5:00 p.m. Eastern daylight time. To register for the live event and to access a supplemental slide presentation, go to the Investor Relations section at www.fidelityinfoservices.com and click on "Events and Multimedia." A webcast replay will be available on FIS' Investor Relations website, and a telephone replay will be available through August 11, 2009, by dialing 800-475-6701 (USA) or 320-365- 3844 (International). The access code will be 106703. To access a PDF version of this release and accompanying financial tables, go to http://www.investor.fidelityinfoservices.com.
About Fidelity National Information Services, Inc.
Fidelity National Information Services, Inc. (NYSE: FIS), a member of the S&P 500 Index, is a leading provider of core processing for financial institutions; card issuer and transaction processing services; and outsourcing services to financial institutions and retailers. FIS has processing and technology relationships with 40 of the top 50 global banks, including nine of the top 10 and was ranked the number one banking technology provider in the world by American Banker and the research firm Financial Insights in the 2008 FinTech 100 rankings. Headquartered in Jacksonville, Fla., FIS maintains a strong global presence, serving more than 14,000 financial institutions in more than 90 countries worldwide. For more information on Fidelity National Information Services, please visit www.fidelityinfoservices.com.
Forward-Looking Statements
This press release contains forward-looking statements, including certain plans, expectations, goals and projections, and statements about FIS's acquisition of Metavante, which are subject to numerous assumptions, risks and uncertainties. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. Forward-looking statements are based on management's beliefs, as well as assumptions made by, and information currently available to, management. Because such statements are based on expectations as to future economic performance and are not statements of fact, actual results may differ materially from those projected. The risks and uncertainties that forward-looking statements are subject to include, without limitation: changes in general economic, business and political conditions, including changes in the financial markets; the effect of governmental regulations, including the possibility that there are unexpected delays in obtaining regulatory approvals; the failure to obtain required transaction approvals from FIS's and Metavante's shareholders; the effects of our substantial leverage which may limit the funds available to make acquisitions and invest in our business; the risks of reduction in revenue from the elimination of existing and potential customers due to consolidation in the banking, retail and financial services industries or due to financial failures suffered by firms in those industries; actions that may be taken by the competitors, customers and suppliers of FIS or Metavante that may cause the transaction to be delayed or not completed; failures to adapt our services to changes in technology or in the marketplace; our potential inability to find suitable acquisition candidates or difficulties in integrating acquisitions; competitive pressures on product pricing and services; and other risks detailed in the "Statement Regarding Forward-Looking Information," "Risk Factors" and other sections of the Company's Form 10-K and other filings with the Securities and Exchange Commission. All forward-looking statements included in this document are based on information available at the time of the document. FIS assumes any obligation to update any forward-looking statement.
FIS-e
Fidelity National Information Services, Inc.
Earnings Release Supplemental Financial Information
July 28,2009
(Unaudited)
Exhibit A Consolidated Statements of Earnings for the Three and Six
Months ended June 30, 2009 and 2008
Exhibit B Consolidated Balance Sheets as of June 30, 2009 and
December 31, 2008
Exhibit C Consolidated Statements of Cash Flows for the Six Months
Ended June 30, 2009 and 2008
Exhibit D Supplemental Non-GAAP Financial Information for the Three and
Six Months Ended June 30, 2009 and 2008
Exhibit E Supplemental GAAP to Non-GAAP Reconciliation - Unaudited for
the Three and Six Months Ended June 30, 2009 and 2008 Exhibit A FIDELITY NATIONAL INFORMATION SERVICES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS - UNAUDITED (In millions, except per share data) Three months Six months ended ended June 30, June 30, ------------ ---------------- 2009 2008 2009 2008 ---- ---- ---- ---- Processing and services revenues $834.8 $869.7 $1,632.6 $1,700.0 Cost of revenues 602.7 674.0 1,199.9 1,322.7 Selling, general and administrative expenses 93.2 117.9 189.3 229.0 Research and development costs 21.5 19.9 44.1 39.2 ---- ---- ---- ---- Operating income 117.4 57.9 199.3 109.1 ----- ---- ----- ----- Other income (expense): Interest income 0.5 1.5 1.3 4.3 Interest expense (31.8) (43.6) (63.8) (82.4) Other income (expense) 5.5 1.3 6.7 0.1 --- --- --- --- Total other income (expense) (25.8) (40.8) (55.8) (78.0) ---- ---- ---- ---- Earnings from continuing operations before income taxes 91.6 17.1 143.5 31.1 Provision for income taxes 31.6 3.3 49.5 6.6 Equity in losses of unconsolidated entities - (0.2) - (0.2) --- --- --- --- Net earnings from continuing operations 60.0 13.6 94.0 24.3 (Loss) earnings from discontinued operations, net of tax (0.4) 59.2 (1.7) 118.8 --- ---- --- ----- Net earnings 59.6 72.8 92.3 143.1 Net earnings attributable to noncontrolling interest (0.4) (0.9) (0.1) (0.7) --- --- --- --- Net earnings attributable to FIS $59.2 $71.9 $92.2 $142.4 ===== ===== ===== ====== Net earnings per share- basic from continuing operations attributable to FIS common stockholders * $0.31 $0.07 $0.49 $0.13 Net earnings (loss) per share-basic from discontinued operations attributable to FIS common stockholders * (0.00) 0.30 (0.01) 0.61 ---- ---- - --- ---- Net earnings per share-basic attributable to FIS common stockholders * $0.31 $0.37 $0.48 $0.74 ===== ===== ===== ===== Weighted average shares outstanding-basic 190.3 192.5 190.2 193.5 ===== ===== ===== ===== Net earnings per share-diluted from continuing operations attributable to FIS common stockholders * $0.31 $0.07 $0.49 $0.12 Net earnings (loss) per share- diluted from discontinued operations attributable to FIS common stockholders * (0.00) 0.30 (0.01) 0.61 ---- ---- - --- ---- Net earnings per share-diluted attributable to FIS common stockholders * $0.31 $0.37 $0.48 $0.73 ===== ===== ===== ===== Weighted average shares outstanding-diluted 192.7 194.4 192.2 195.5 ===== ===== ===== ===== Amounts attributable to FIS common stockholders: Net earnings from continuing operations, net of tax $59.6 $13.3 $93.9 $24.2 (Loss) earnings from discontinued operations, net of tax (0.4) 58.6 (1.7) 118.2 --- ---- --- ----- Net earnings attributable to FIS common stockholders $59.2 $71.9 $92.2 $142.4 ===== ===== ===== ====== * Amounts may not sum due to rounding. Exhibit B FIDELITY NATIONAL INFORMATION SERVICES, INC.