Brookfield, Wis., Feb. 6, 2008-Fiserv, Inc. (NASDAQ: FISV), a leading provider of information management systems and services solutions, today reported financial results for the fourth quarter and full year. The 2007 financial results reflect the dispositions of certain businesses, including Fiserv Health, which was reported as discontinued operations in the fourth quarter of 2007 and for all prior periods presented.
Total revenues increased 19 percent to $1.11 billion for the fourth quarter compared with $930.1 million in 2006. For the full year, revenues were $3.92 billion, up 10 percent compared with $3.57 billion in 2006. Adjusted internal revenue growth in the company's financial segment was 4 percent in the fourth quarter and 5 percent for the full year 2007.
GAAP earnings per share for the fourth quarter of 2007 were $0.58 per share, including $0.54 from continuing operations, compared with $0.52 in 2006. GAAP earnings per share for 2007 were $2.60 per share, including $2.42 from continuing operations, compared with $2.19 in 2006.
Adjusted earnings per share from continuing operations were $0.69 for the fourth quarter of 2007, compared with $0.58 for the fourth quarter of 2006, an increase of 19 percent. Adjusted earnings per share from continuing operations for 2007 were $2.66, compared with $2.31 for 2006, an increase of 15 percent.
Overall adjusted operating margin increased 110 basis points to 25.8 percent for the fourth quarter, and was 26.1 percent for the full year, an increase of 100 basis points compared with the prior year. Financial segment adjusted operating margin increased 200 basis points to 27.0 percent for the quarter, and for the full year was up 270 basis points to 27.1 percent compared to the prior year periods.
"Our fourth quarter financial results validate the strength of our recurring-revenue business model and cap a very strong year," said Jeffery Yabuki, President and Chief Executive Officer of Fiserv. "We delivered on our financial goals while significantly re-shaping the company to enhance our financial profile."
ACQUISITION AND DIVESTITURE ACTIVITY
Fiserv recently completed a number of transformative transactions:
OTHER BUSINESS AND OPERATING HIGHLIGHTS
OUTLOOK FOR 2008
Fiserv expects full-year 2008 adjusted earnings from continuing operations to be within a range of $3.33 to $3.47 per share, which represents growth of 25 to 30 percent compared with adjusted earnings per share from continuing operations of $2.66 in 2007. Fiserv expects full-year 2008 overall company adjusted internal revenue growth of 5 to 7 percent, with the financial segment at the upper end of the range and the insurance segment at the lower end of the range.
"We expect to achieve strong results in 2008 even in the face of market variability," said Yabuki. "And given the nature of our business model, we believe we are positioned to achieve similarly strong results in 2009."
EARNINGS CONFERENCE CALL
The company will discuss its fourth quarter and full-year 2007 results on a conference call and web cast at 4 p.m. CST on Feb. 6. To register for the event and to access supporting materials, go to http://www.fiserv.com/ and click on the link for the event in the "Upcoming Events" section of the home page. From there, click "Access Event."
USE OF NON-GAAP FINANCIAL INFORMATION
We supplement our reporting of total revenues, operating income, income from continuing operations, net income and earnings per share information determined in accordance with GAAP by using "adjusted revenues," "adjusted operating income," "adjusted income from continuing operations," "adjusted earnings per share from continuing operations," "free cash flow," and "adjusted internal revenue growth," in this earnings release. Management believes that certain non-cash or unusual adjustments to revenues or expenses and the exclusion of certain pass-through revenues and expenses enhance the evaluation of our performance, because they are not pertinent to day-to-day operational decisions made in the business. Therefore, we exclude these items from GAAP revenue, operating income, income from continuing operations and earnings per share in calculating these non-GAAP measures.
Examples of such non-cash or unusual items may include, but are not limited to: non-cash deferred revenue adjustments arising from acquisitions, non-cash intangible asset amortization expense associated with acquisitions, and merger and integration expenses, all offset by the cumulative income tax impact of these items. We exclude these items to more clearly focus on the factors we believe are pertinent to the daily management of our operations, and our management uses such results to evaluate the impact of operational business decisions. We regularly report adjusted results to our chief executive officer, who uses this information to allocate resources to our various business units.
For a discussion of free cash flow and adjusted internal revenue growth, please see pages 10 and 12, respectively. We believe this supplemental information is useful to investors for their independent evaluation and understanding of the performance of our management and our core business performance. These non-GAAP measures should be considered in addition to, and not as a substitute for, revenues, operating income, income from continuing operations, net income and earnings per share or any other amount determined in accordance with GAAP. These non-GAAP measures reflect management's judgment of particular items, and may not be comparable to similarly titled measures reported by other companies.
About Fiserv, Inc.
Fiserv, Inc. (NASDAQ: FISV), a Fortune 500 company, provides information management and electronic commerce systems and services to the financial and insurance industries. Leading services include transaction processing, outsourcing, electronic bill payment and presentment, investment management solutions, business process outsourcing (BPO), software and systems solutions. Headquartered in Brookfield, Wis., the company is the leading provider of core processing solutions for U.S. banks, credit unions and thrifts. Fiserv was ranked the largest provider of information technology services to the financial services industry worldwide in the 2004, 2005 and 2006 FinTech 100 surveys. In 2007, the company completed the acquisition of CheckFree, a leading provider of electronic commerce services. Fiserv reported nearly $4 billion in total revenue from continuing operations for 2007. For more information, please visit http://www.fiserv.com/.
