Total System Services, Inc. (TSS) has reported a 10.72 percent fall in profit for the quarter ended Dec. 31, 2016. The company has earned $73.95 million, or $0.40 a share in the quarter, compared with $82.83 million, or $0.45 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $129.62 million, or $0.71 a share compared with $103.93 million or $0.57 a share, a year ago.
Revenue during the quarter surged 57.95 percent to $1,132.22 million from $716.84 million in the previous year period. Gross margin for the quarter contracted 476 basis points over the previous year period to 27.02 percent. Total expenses were 88.47 percent of quarterly revenues, up from 83.55 percent for the same period last year. That has resulted in a contraction of 492 basis points in operating margin to 11.53 percent.
Operating income for the quarter was $130.55 million, compared with $117.90 million in the previous year period.
However, the adjusted operating income for the quarter stood at $219.71 million compared to $150.90 million in the prior year period. At the same time, adjusted operating margin contracted 165 basis points in the quarter to 19.41 percent from 21.05 percent in the last year period.
"2016 was truly an exceptional year in the history of our company. We delivered record financial results, completed our largest acquisition in TransFirst that doubled the size of our Merchant business, and finished the year with results in all four segments having met or exceeded our goals," said M. Troy Woods, chairman and chief executive officer of TSYS.
For fiscal year 2017, Total System Services, Inc. forecasts revenue to be in the range of $4,750 million to $4,850 million. It forecasts adjusted revenue to be in the range of $3,275 million to $3,325 million. It expects diluted earnings per share to be in the range of $2.14 to $2.21. It expects diluted earnings per share to be in the range of $3.05 to $3.15 on adjusted basis for the same period.
Operating cash flow improves
Total System Services, Inc. has generated cash of $717.91 million from operating activities during the year, up 19.61 percent or $117.72 million, when compared with the last year.
The company has spent $2,492.88 million cash to meet investing activities during the year as against cash outgo of $202.18 million in the last year.
Cash flow from financing activities was $1,822.19 million for the year as against cash outgo of $290.75 million in the last year period.
Cash and cash equivalents stood at $425.35 million as on Dec. 31, 2016, up 9.25 percent or $36.03 million from $389.33 million on Dec. 31, 2015.
Debt increases substantially
Total System Services, Inc. has witnessed an increase in total debt over the last one year. It stood at $3,364 million as on Dec. 31, 2016, up 135.07 percent or $1,932.92 million from $1,431.09 million on Dec. 31, 2015. Total debt was 52.84 percent of total assets as on Dec. 31, 2016, compared with 36.62 percent on Dec. 31, 2015. Debt to equity ratio was at 1.60 as on Dec. 31, 2016, up from 0.77 as on Dec. 31, 2015.
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