National Processing, Inc. reported that net income for the three months ended September 30, 1999, was $8,321,000 or $.16 per share, compared to $3,381,000 or $.06 per share for the corresponding period in 1998. Included in 1998 net income was a one-time settlement fee of $4,000,000, or $2,400,000 after tax, received for the cancellation of a processing contract. Absent this item, third quarter 1998 net income would have been $981,000 or $.02 per share.
Total revenues for the three months ended September 30, 1999, were $94,909,000, up 15% from comparable amounts in 1998, and were derived solely from the Company’s core business units — Merchant Card Services, Travel Services and Outsourcing Services. Comparable 1998 revenues were $82,372,000 from these core units. Reported revenues for the third quarter of 1998 were $121,430,000 and included $39,058,000 for business lines which were divested in the first half of 1999: Freight Payables, Payables Outsourcing, Remittance, and Merchant Check Services.
For the nine months ended September 30, 1999, exclusive of restructuring charges and impairment loss, net income was $22,247,000 or $.44 per share, compared to net income of $9,861,000 or $.19 per share for the corresponding period of 1998. After-tax impairment losses of $68,309,000 recorded in the first half relating to the business line divestitures noted above, and after- tax restructuring charges of $1,829,000 recorded in the first quarter for closure and relocation of certain processing facilities, resulted in a reported net loss for the first nine months of 1999 of $47,891,000 or $.94 per share. Included in net income for the first nine months of 1998 were the third quarter settlement fee noted above, plus after-tax charges of $1,558,000 recorded in the second quarter of 1998 for the write-off of software and related costs following the cancellation of a customer processing contract. Exclusive of these items, net income for the first nine months of 1998 would have been $9,019,000 or $.18 per share.
Total revenues for the first nine months of 1999 were $329,185,000 compared to $354,257,000 for the first nine months of 1998. For the Company’s core business units — Merchant Card Services, Travel Services, and Outsourcing Services — revenues were $271,850,000 for the first nine months of 1999, up 15% from $235,708,000 in 1998.
Commenting on the financial results, Thomas A. Wimsett, President and CEO, stated, “Revenues in each of the core units have increased sequentially through the first three quarters of the year, and year-to-date net income for each of these units has exceeded the business plan established at the start of the year. We are gratified that the restructuring and refocusing of the company has begun to pay off in a tangible way, and we will continue to work hard to keep things moving forward.”
National Processing, Inc. is a leading provider of merchant credit card processing services and corporate outsourcing solutions. Approximately one out of every six Visa and MasterCard transactions in the United States is processed by National Processing. The Company is 88 percent owned by National City Corporation (NYSE: NCC).
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