HEARTLAND PAYMENT SYSTEMS INC - FORM 8-K - EX-99.1 - EXHIBIT - October 30, 2013

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Heartland Payment Systems 90 Nassau Street
Princeton, NJ 08542 888.798.3131
HeartlandPaymentSystems.com




HEARTLAND PAYMENT SYSTEMS REPORTS RECORD QUARTERLY EARNINGS


THIRD QUARTER ADJUSTED EARNINGS PER SHARE INCREASE 22%

All-time quarterly record New Margin Installed



Princeton, NJ - October 30, 2013 - Heartland Payment Systems, Inc. (NYSE: HPY), one of the nation's largest payment processors and leading provider of merchant business solutions, today announced Adjusted Net Income and Adjusted Earnings per Share of $25.1 million and $0.66, respectively, for the quarter ended September 30, 2013, up 14% and 22% compared with Adjusted Net Income and Adjusted Earnings per Share of $22.0 million and $0.54, respectively, for the quarter ended September 30, 2012. GAAP net income from continuing operations for the quarter ended September 30, 2013 was $22.0 million, or $0.58 per share, compared with $18.9 million, or $0.47 per share for the quarter ended September 30, 2012. Adjusted Net Income and Adjusted Earnings per Share are non-GAAP measures that are detailed later in this press release in the section “Reconciliation of Non-GAAP Financial Measures.”


Highlights for the third quarter of 2013 include:

•
Record Small and Mid-Sized Enterprise (SME) quarterly transaction processing volume of $19.6 billion, up 3.9% from the third quarter of 2012

•
Record quarterly Net Revenue of $153.2 million, up 9.5% from the third quarter of 2012

•
Operating Margin on Net Revenue of 22.8%, compared with 23.4% for the same quarter in 2012. The operating margin for the first nine months of this year was 21.1%, down slightly from 21.3% for the first nine months of last year

•
Same store sales rose 1.6% and volume attrition was 13.1% in the third quarter of 2013




Page 1


•
An all-time record $18.5 million new margin installed, up 28% from the third quarter of 2012, with new card margin installed up 29% in the quarter

•
The combination of share-based compensation and acquisition-related amortization reduced earnings by $4.8 million pre-tax, or approximately $0.08 per share, compared with $5.0 million pre-tax, or $0.07 per share in the third quarter of 2012

Robert Carr, Chairman and CEO, commented, "Record results this quarter once again reflect the growing strength of the Heartland franchise and our ability to deliver true value for our merchants. This quarter we achieved record new margin installed, led by strong growth in our SME card business, as we continued to successfully add highly productive new relationship managers. The continued increase in new SME card margin installed is key to accelerating the rate of organic card net revenue growth. Non-card businesses such as Payroll, Campus Solutions and Micropayments also performed exceptionally well this quarter. And, we managed to achieve strong operating margins despite an increase in the level of investment spending incurred over the past three months. In a market that is in the midst of a wave of change, Heartland is responding with innovative new products and services that help improve our merchants' businesses, while creating value for our shareholders."

SME card processing volume for the three months ended September 30, 2013 was up 3.9% from the year-ago quarter to $19.6 billion, as new card margin installed grew 29%, same store sales rose 1.6% and volume attrition was 13.1%. Net revenue in the quarter increased 9.5% over the prior year, with steady growth in card processing, a more than doubling in Payroll, strong contribution from Campus Solutions and an 88% increase in Micropayments. Operating income in the quarter was a record $34.9 million. The operating margin was 22.8% of net revenue for the quarter, down from a year ago as savings from a reduction in the rate of general and administrative expense growth compared to the first half of the year were invested in new growth initiatives. In the aggregate, share-based compensation and acquisition related amortization expense reduced earnings by $0.08 per share in the third quarter of 2013, compared to $0.07 per share in the third quarter of 2012.

Mr. Carr continued. "Recent investments in Leaf and Tabbed Out, new partnerships with Bigcommerce in eCommerce, and the introduction of our innovative SaaS solution in Heartland School Solutions that helped us win the Chicago Board of Education contract, are examples of how our vision is driving an exciting transformation of our business in a constantly changing world. In contrast to the development of new standalone products and applications, we are taking an integrated view of the role technology can play in the evolving needs of the small to mid-sized merchant. And, our proprietary sales organization provides us with the industry's single largest network of qualified professionals who have earned the trust and confidence of merchants as not just a vendor, but as consultants who have their best interests at heart. This is why I feel Heartland has never been in a better position to capitalize on the tremendous growth opportunities unfolding before us, and to create significant value for our shareholders."


Page 2



NINE MONTH RESULTS:
Adjusted net income from continuing operations and related earnings per share for the first nine months of 2013 were $67.6 million or $1.77 per share, respectively, compared with $58.6 million, or $1.45 per share, respectively, in the first nine months of 2012. Net revenue for the first nine months of 2013 was $450 million, up 13.1% compared with the first nine months of 2012. For the first nine months of 2013, GAAP net income from continuing operations was $57.3 million or $1.50 per share, compared with $49.9 million, or $1.23 per share for the first nine months of 2012. Year-to-date 2013, share-based compensation and acquisition-related amortization expense have reduced net income by $10.3 million, or $0.27 per share, compared with $8.7 million, or $0.22 per share in the first nine months of 2012.

FULL YEAR 2013 GUIDANCE:
For full year 2013, we now expect Net Revenue to be between approximately $600 million and $605 million. Adjusted Earnings are expected to be between $2.30 and $2.33 per share, which is net of $0.37 per share of combined acquisition-related amortization and share-based compensation expense. Additionally, 2013 Adjusted Earnings will reflect an estimated $0.04 per share of proportionate losses on the consolidation of Leaf.

BOARD DECLARES QUARTERLY DIVIDEND; SHARE REPURCHASE PROGRAM UPDATE
The Company also announced that the Board of Directors declared a quarterly dividend of $0.07 per common share payable December 13, 2013 to shareholders of record on November 22, 2013. In the third quarter, the Company utilized approximately $6 million in cash to repurchase approximately 158,000 shares at an average cost of $38.00 per share, raising the amount of cash used to repurchase shares to over $40 million so far this year. At the end of the quarter, approximately $64.6 million remained outstanding on the Company's existing repurchase authorization.

CONFERENCE CALL:
Heartland Payment Systems, Inc. will host a conference call on October 30, 2013 at 8:30 a.m. Eastern Time to discuss financial results and business highlights. Heartland Payment Systems invites all interested parties to listen to its conference call, broadcast through a webcast on the Company's website. To access the call, please visit the Investor Relations portion of the Company's website at: www.heartlandpaymentsystems.com. The conference call may be accessed by calling (888) 510-1765. Please provide the operator with PIN number 2370591. The webcast will be archived on the Company's website within two hours of the live call.













Page 3



About Heartland Payment Systems
Heartland Payment Systems, Inc. (NYSE: HPY), the fifth-largest payments processor in the United States, delivers credit/debit/prepaid card processing, mobile commerce, eCommerce, marketing solutions, security technology, payroll solutions and related business solutions and services to more than 275,000 business and educational locations nationwide. A FORTUNE 1000 company, Heartland is the founding supporter of The Merchant Bill of Rights, a public advocacy initiative that educates merchants about fair credit and debit card processing practices. Heartland also established The Sales Professional Bill of Rights to advocate for the rights of sales professionals everywhere. More detailed information can be found at HeartlandPaymentSystems.com, HeartlandPaymentSystems.com/Careers, Heartlandpaymentsystems.com/Blog or following the company on Twitter @HeartlandHPY and Facebook at facebook.com/HeartlandHPY.


Forward-looking Statements

This press release contains statements of a forward-looking nature which represent our management's beliefs and assumptions concerning future events. Forward-looking statements involve risks, uncertainties and assumptions and are based on information currently available to us. Actual results may differ materially from those expressed in the forward-looking statements due to many factors, including risks and additional factors that are described in our Securities and Exchange Commission filings, including but not limited to our annual report on Form 10-K for the year ended December 31, 2012. We undertake no obligation to update any forward-looking statements to reflect events or circumstances that may arise after the date of this release.


Contact
Joe Hassett
Gregory FCA Communications
27 West Athens Ave.
Ardmore, PA 19003
Tel: 610-228-2110
Email: Heartland_ir@gregoryfca.com



TABLES FOLLOW















Page 4





Heartland Payment Systems, Inc. and Subsidiaries
Condensed Consolidated Statements of Income and Comprehensive Income
(In thousands, except per share data)
(unaudited)
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2013
 
2012
 
2013
 
2012
Total revenues
$
557,129

 
$
530,677

 
$
1,604,992

 
$
1,513,471

Costs of services:
 
 
 
 
 
 
 
Interchange
350,734

 
336,628

 
1,003,039

 
965,318

Dues, assessments and fees
53,165

 
54,121

 
152,146

 
150,494

Processing and servicing
60,195

 
54,344

 
177,968

 
165,910

Customer acquisition costs
10,838

 
10,647

 
31,554

 
33,346

Depreciation and amortization
5,454

 
5,344

 
14,066

 
14,168

Total costs of services
480,386

 
461,084

 
1,378,773

 
1,329,236

General and administrative
41,871

 
36,787

 
131,242

 
99,645

Total expenses
522,257

 
497,871

 
1,510,015

 
1,428,881

Income from operations
34,872

 
32,806

 
94,977

 
84,590

Other income (expense):
 
 
 
 
 
 
 
Interest income
29

 
31

 
95

 
169

Interest expense
(1,243
)
 
(938
)
 
(3,746
)
 
(2,544
)
Provision for processing system intrusion costs
(13
)
 
(290
)
 
(252
)
 
(528
)
Other, net
103

 
(921
)
 
182

 
(925
)
Total other expense
(1,124
)
 
(2,118
)
 
(3,721
)
 
(3,828
)
Income from continuing operations before income taxes
33,748

 
30,688

 
91,256

 
80,762

Provision for income taxes
11,857

 
11,745

 
34,039

 
30,893

Net income from continuing operations
21,891

 
18,943

 
57,217

 
49,869

Income from discontinued operations, net of income tax
      of $—, $229, $2,135 and $555
—

 
624

 
3,970

 
1,512

Net income
21,891

 
19,567

 
61,187

 
51,381

Less: Net income (loss) attributable to noncontrolling interests
 
 
 
 
 
 
 
      Continuing operations
(90
)
 
—

 
(90
)
 
—

      Discontinued operations
—

 
187

 
56

 
446

Net income attributable to Heartland
$
21,981

 
$
19,380

 
$
61,221

 
$
50,935

 
 
 
 
 
 
 
 
Amounts Attributable to Heartland:
 
 
 
 
 
 
 
Net income from continuing operations, net of noncontrolling interests
21,981

 
18,943

 
57,307

 
49,869

Income from discontinued operations, net of income tax and
noncontrolling interests
—

 
437

 
3,914

 
1,066

Net income attributable to Heartland
21,981

 
19,380

 
61,221

 
50,935

 
 
 
 
 
 
 
 
Basic earnings per share:
 
 
 
 
 
 
 
      Income from continuing operations
$
0.60

 
$
0.49

 
$
1.56

 
$
1.28

      Income from discontinued operations
—

 
0.01

 
0.11

 
0.03

      Basic earnings per share
$
0.60

 
$
0.50

 
$
1.67

 
$
1.31

 
 
 
 
 
 
 
 
Diluted earnings per share:
 
 
 
 
 
 
 
      Income from continuing operations
$
0.58

 
$
0.47

 
$
1.50

 
$
1.23

      Income from discontinued operations
—

 
0.01

 
0.10

 
0.03

      Diluted earnings per share
$
0.58

 
$
0.48

 
$
1.60

 
$
1.26

 
 
 
 
 
 
 
 
Weighted average number of common shares outstanding:
 
 
 
 
 
 
 
Basic
36,857

 
38,813

 
36,752

 
38,831

Diluted
38,020

 
40,352

 
38,079

 
40,454


Page 5



Heartland Payment Systems, Inc. and Subsidiaries
Condensed Consolidated Statements of Comprehensive Income
(In thousands)
(unaudited)

 
Three Months Ended
September 30,
 
Nine Months Ended
September 30
 
2013
 
2012
 
2013
 
2012
 
 
 
 
 
 
 
 
Net income
$
21,891

 
$
19,567

 
$
61,187

 
$
51,381

Other comprehensive income (loss):
 
 
 
 
 
 
 
Unrealized gains on investments,
net of income tax of $—, $10, $4 and $19
—

 
15

 
4

 
30

Unrealized gains (losses) on derivative financial instruments,
net of tax of $25, $12, $121 and $20
152

 
(19
)
 
315

 
(28
)
Foreign currency translation adjustment
—

 
500

 
(54
)
 
464

Comprehensive income
22,043

 
20,063

 
61,452

 
51,847

Less: Comprehensive (loss) income attributable to noncontrolling interests
(90
)
 
337

 
(50
)
 
585

Comprehensive income attributable to Heartland
$
22,133

 
$
19,726

 
$
61,502

 
$
51,262


Page 6




Heartland Payment Systems, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands, except share data)
(unaudited)
 
September 30,
2013
 
December 31,
2012
Assets
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
67,156

 
$
48,440

Funds held for customers
111,895

 
131,405

Receivables, net
195,678

 
180,448

Investments
4,650

 
1,199

Inventory
10,268

 
9,694

Prepaid expenses
12,957

 
10,421

Current tax assets
5,588

 
—

Current deferred tax assets, net
10,382

 
10,475

Assets held for sale
—

 
17,044

Total current assets
418,574

 
409,126

Capitalized customer acquisition costs, net
57,711

 
56,425

Property and equipment, net
139,160

 
125,031

Goodwill
191,172

 
168,062

Intangible assets, net
52,147

 
53,594

Deposits and other assets, net
449

 
1,176

Total assets
$
859,213

 
$
813,414

 
 
 
 
Liabilities and Equity
 
 
 
Current liabilities:
 
 
 
Due to sponsor banks
$
42,633

 
$
37,586

Accounts payable
66,175

 
64,065

Customer fund deposits
111,895

 
131,405

Processing liabilities
108,144

 
95,273

Current portion of borrowings
111,000

 
102,001

Current portion of accrued buyout liability
13,667

 
10,478

Accrued expenses and other liabilities
50,280

 
47,817

Current tax liabilities
—

 
4,323

Liabilities related to assets held for sale
—

 
1,672

Total current liabilities
503,794

 
494,620

Deferred tax liabilities, net
38,830

 
29,632

Reserve for unrecognized tax benefits
4,267

 
3,069

Long-term portion of borrowings
35,000

 
50,000

Long-term portion of accrued buyout liability
23,195

 
24,932

Total liabilities
605,086

 
602,253

Commitments and contingencies
—

 
—

 
 
 
 
Equity
 
 
 
Common stock, $0.001 par value, 100,000,000 shares authorized, 37,150,990 and 37,571,708 shares
issued at September 30, 2013 and December 31, 2012; 36,853,090 and 36,855,908 outstanding at
September 30, 2013 and December 31, 2012
37

 
38

Additional paid-in capital
236,684

 
222,705

Accumulated other comprehensive loss
(35
)
 
(399
)
Retained earnings
21,141

 
7,629

Treasury stock, at cost (297,900 and 715,800 shares at September 30, 2013 and December 31, 2012)
(10,408
)
 
(20,187
)
Total stockholders’ equity
247,419

 
209,786

Noncontrolling interests
6,708

 
1,375

Total equity
254,127

 
211,161

Total liabilities and equity
$
859,213

 
$
813,414

        

Page 7



Heartland Payment Systems, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flow
(In thousands)
(unaudited)
 
Nine Months Ended
September 30
 
2013
 
2012
Cash flows from operating activities
 
 
 
Net income
$
61,187

 
$
51,381

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Amortization of capitalized customer acquisition costs
33,936

 
33,758

Other depreciation and amortization
26,070

 
20,641

Addition to loss reserves
2,510

 
1,827

(Recovery) provision for doubtful receivables
(1
)
 
793

Deferred taxes
5,632

 
3,558

Share-based compensation
9,763

 
10,412

Gain on sale of business
(3,786
)
 
—

Other
386

 
964

Changes in operating assets and liabilities:
 
 
 
Increase in receivables
(15,135
)
 
(8,519
)
(Increase) decrease in inventory
(524
)
 
1,685

Payment of signing bonuses, net
(19,546
)
 
(22,446
)
Increase in capitalized customer acquisition costs
(15,676
)
 
(12,748
)
(Increase) decrease in prepaid expenses
(2,361
)
 
1,329

(Increase) decrease in current tax assets
(1,515
)
 
1,968

Increase in deposits and other assets
(296
)
 
(81
)
Excess tax benefits on employee share-based compensation
(8,382
)
 
(6,175
)
Increase in reserve for unrecognized tax benefits
1,198

 
675

Increase (decrease) in due to sponsor banks
5,048

 
(10,823
)
Increase in accounts payable
1,656

 
14,593

Decrease (increase) in accrued expenses and other liabilities
(4,522
)
 
2,423

Increase in processing liabilities
10,310

 
10,528

Payouts of accrued buyout liability
(11,842
)
 
(9,401
)
Increase in accrued buyout liability
13,294

 
12,336

Net cash provided by operating activities
87,404

 
98,678

Cash flows from investing activities
 
 
 
Purchase of investments
(5,241
)
 
(5,225
)
Maturities of investments
1,430

 
3,396

Decrease in funds held for customers
19,519

 
3,344

Decrease in customer fund deposits
(19,510
)
 
(3,294
)
Proceeds from sale of business
19,343

 
—

Acquisitions of businesses, net of cash acquired
(15,182
)
 
(23,682
)
Purchases of property and equipment
(36,929
)
 
(25,029
)
Net cash used in investing activities
(36,570
)
 
(50,490
)
Cash flows from financing activities
 
 
 
Proceeds from borrowings
9,000

 
26,000

Principal payments on borrowings
(15,000
)
 
(37,253
)
Proceeds from exercise of stock options
10,725

 
16,828

Excess tax benefits on employee share-based compensation
8,382

 
6,175

Repurchases of common stock
(39,632
)
 
(48,202
)
Dividends paid on common stock
(7,735
)
 
(7,012
)
Net cash used in financing activities
(34,260
)
 
(43,464
)
 
 
 
 
Net increase in cash
16,574

 
4,724

Effect of exchange rates on cash
1

 
30

Cash at beginning of year
50,581

 
40,301

Cash at end of period
$
67,156

 
$
45,055


Page 8



Reconciliation of Non-GAAP Financial Measures And Regulation G Disclosure

To supplement its consolidated financial statements presented in accordance with accounting principles generally accepted in the United States (“GAAP”), the Company provides additional measures of its operating results on a continuing operations basis, namely income from operations, operating margin, net income and earnings per share, which exclude acquisition-related amortization expense and share-based compensation expense. These measures meet the definition of a non-GAAP financial measure. The Company believes that application of these non-GAAP financial measures is appropriate to enhance understanding of its historical performance as well as prospects for its future performance.

Use and Economic Substance of the Non-GAAP Financial Measures - Management uses these non-GAAP measures to evaluate performance period over period, to analyze the underlying trends in the Company's business, to assess its ongoing operating performance relative to its competitors, as certain industry competitors measure their operating results excluding acquisition-related amortization expense and share-based compensation expense, and to establish the Company’s operational goals and forecasts. Acquisition-related amortization expense and share-based compensation expense are excluded as non-cash expenses that the Company does not believe are reflective of ongoing operating results of existing and acquired businesses. Additionally, share-based compensation expense is an amount excluded from calculations of earnings per share used in measuring achievement of performance targets required for the vesting of certain performance-based share awards.

The following is an explanation of the adjustments that management excluded as part of its non-GAAP measures for the three and nine months ended September 30, 2013 and 2012:
Acquisition-related Amortization Expense - This expense consists of the amortization of intangible assets such as customer relationships, software, non-compete agreements and merchant portfolios acquired through business combinations. The Company excludes acquisition-related amortization expense from its non-GAAP measures of income from operations, operating margin, net income and earnings per share primarily because:
•
Acquisition-related amortization expense is non-cash expense that the Company does not believe is reflective of its ongoing operating results, or contributions from its acquired businesses; and
•
The Company's acquisition activity has increased significantly in recent years, with the result that acquisition-related amortization expense has become more significant.
Share-based Compensation Expense - These expenses consist of costs related to the stock options, restricted stock units, and performance share units, which the Company has granted its employees. The Company excludes share-based compensation expense from its non-GAAP measures of income from operations, operating margin, net income and earnings per share primarily because:
•
Share-based compensation expense is non-cash expense that the Company does not believe is reflective of ongoing operating results;
•
Share-based compensation expense is excluded from calculations of earnings per share used in measuring its achievement of certain performance targets required for the vesting of performance-based awards; and
•
The Company's use of performance-based share awards has increased significantly in recent years, with the result that reported share-based compensation expense can vary significantly from year to year, or quarter to quarter, in ways that may not be related to the underlying operating performance of the Company.
Material Limitations Associated with the Use of Non-GAAP Financial Measures - Non-GAAP income from operations, operating margin, net income and earnings per share that exclude the impact of acquisition-related amortization expense and share-based compensation expense may have limitations as analytical tools, and these non-GAAP measures should not be considered in isolation from or as a replacement for GAAP financial measures, and should be considered only as supplemental to the Company's GAAP financial measures. Some of the limitations associated with the use of these non-GAAP financial measures are:
•
Acquisition-related amortization expense and share-based compensation expense that are excluded from non-GAAP income from operations, operating margin, net income and non-GAAP earnings per share can have a material impact on GAAP net income and GAAP earnings per share.
•
Other companies may calculate non-GAAP income from operations, operating margin, net income and non-GAAP earnings per share that exclude the impact of similar expenses differently than the Company does, limiting the usefulness of those measures for comparative purposes.


Page 9


Usefulness of Non-GAAP Financial Measures to Investors - The Company believes that presenting non-GAAP income from operations, operating margin, net income and non-GAAP earnings per share that exclude the impact of acquisition-related amortization expense and share-based compensation expense in addition to the related GAAP measures provides investors greater transparency to the information used by the Company's management for its financial and operational decision-making and allows investors to see the Company's results through the eyes of management. Additionally, the Company believes that the inclusion of these non-GAAP financial measures provides enhanced comparability in its financial reporting. The Company further believes that providing this information better enables its investors to understand the Company's operating performance and underlying business fundamentals, and to evaluate the methodology used by management to evaluate and measure such performance.

This press release contains non-GAAP financial measures within the meaning of Regulation G promulgated by the Securities and Exchange Commission. Pursuant to Regulation G, a reconciliation of these non-GAAP financial measures with the comparable financial measures calculated in accordance with GAAP for the three and nine months ended September 30, 2013 and 2012 follows (in thousands except per share data):
Three Months Ended September 30, 2013
GAAP
 
Acquisition-
related
Amortization
 
Share-based
Compensation
 
Adjusted
Non-GAAP
Income from Operations
$
34,872

 
$
2,242

 
$
2,625

 
$
39,739

Operating Margin (a)
22.8
%
 
 
 
 
 
25.9
%
Net Income From Continuing Operations Attributable to Heartland
$
21,981

 
$
1,454

 
$
1,703

 
$
25,138

Diluted Earnings Per Share From Continuing Operations
$
0.58

 
$
0.04

 
$
0.04

 
$
0.66

Diluted Shares Used in Computing Earnings Per Share
      From Continuing Operations
38,020

 
 
 
 
 
38,020

Three Months Ended September 30, 2012
GAAP
 
Acquisition-
related
Amortization
 
Share-based
Compensation
 
Adjusted
Non-GAAP
Income from Operations
$
32,806

 
$
1,520

 
$
3,511

 
$
37,837

Operating Margin (a)
23.4
%
 
 
 
 
 
27.0
%
Net Income From Continuing Operations Attributable to Heartland
$
18,943

 
$
938

 
$
2,167

 
$
22,048

Diluted Earnings Per Share From Continuing Operations
$
0.47

 
$
0.02

 
$
0.05

 
$
0.54

Diluted Shares Used in Computing Earnings Per Share
      From Continuing Operations
40,352

 
 
 
 
 
40,352

Nine Months Ended September 30, 2013
GAAP
 
Acquisition-
related
Amortization
 
Share-based
Compensation
 
Adjusted
Non-GAAP
Income from Operations
$
94,977

 
$
6,773

 
$
9,763

 
$
111,513

Operating Margin (a)
21.1
%
 
 
 
 
 
24.8
%
Net Income From Continuing Operations Attributable to Heartland
$
57,307

 
$
4,237

 
$
6,087

 
$
67,631

Diluted Earnings Per Share From Continuing Operations
$
1.50

 
$
0.11

 
$
0.16

 
$
1.77

Diluted Shares Used in Computing Earnings Per Share
      From Continuing Operations
38,079

 
 
 
 
 
38,079

Nine Months Ended September 30, 2012
GAAP
 
Acquisition-
related
Amortization
 
Share-based
Compensation
 
Adjusted
Non-GAAP
Income from Operations
$
84,590

 
$
3,705

 
$
10,412

 
$
98,707

Operating Margin (a)
21.3
%
 
 
 
 
 
24.8
%
Net Income From Continuing Operations Attributable to Heartland
$
49,869

 
$
2,288

 
$
6,430

 
$
58,587

Diluted Earnings Per Share From Continuing Operations
$
1.23

 
$
0.06

 
$
0.16

 
$
1.45

Diluted Shares Used in Computing Earnings Per Share
      From Continuing Operations
40,454

 
 
 
 
 
40,454

 
 
 
 
 
 
 
 
(a) Operating Margin is measured as Income from Operations divided by Net Revenue. Net Revenue is defined as total revenues less
      interchange fees and dues, assessments and fees.


Page 10

HEARTLAND PAYMENT SYSTEMS INC Reports