TSYS reported results for the third quarter of 2016.

“We were very pleased with this quarter’s financial performance as all four of our operating segments exceeded our expectations. We remain on track with our TransFirst integration activities and continue to be laser-focused on successfully combining our legacy merchant businesses with TransFirst,” said M. Troy Woods, chairman and chief executive officer of TSYS.

Highlights for the third quarter of 2016 include:

• Total revenues were $1.1 billion, an increase of 62.0% over last year’s $707.9 million.

• Net revenue (non-GAAP), which excludes reimbursable items, interchange and assessment expense, was $789.6 million, an increase of 24.1% over last year’s $636.4 million.

• GAAP net income attributable to TSYS common shareholders was $85.4 million, a decrease of 29.2% from last year’s $120.6 million. GAAP basic earnings per share were $0.46 per share, a decrease of 29.2% from last year’s $0.66. 

• Adjusted EBITDA (non-GAAP) was $269.1 million, an increase of 12.7% over last year’s $238.9 million. Q3 ’15 results included tax benefits of $15.1 million that did not recur in 2016. 

• Adjusted earnings (non-GAAP) were $130.7 million, a decrease of 8.8% over last year’s $143.3 million. Q3 ’15 adjusted earnings and adjusted EPS (non-GAAP) included $23.6 million and $0.13, respectively, of tax related benefits that did not recur in 2016. Q3 ’16 adjusted EPS was $0.71, which included $0.06 of headwinds for currency and severance expenses, a decrease of 8.7% over last year’s $0.78.

“Our cash flow from operating activities and free cash flow for the first nine months of the year were both records. This allowed us to reduce our debt by $175 million during the quarter, bringing the total debt reduction to $300 million year to date,” said Woods.

During the third quarter, currencies, including the rapid and steep decline in the British Pound compared to the U. S. Dollar, negatively impacted total revenues and net revenue by $14 million and $13 million, respectively, on a constant currency basis compared to 2015. A similar impact is expected in Q4. This same constant currency comparison negatively impacted EPS by $0.03 in Q3 ‘16 and is expected to have a similar impact in Q4.

The Consumer Financial Protection Bureau released its long-awaited rule on prepaid financial products on October 5, 2016. The new rule is not expected to have a significant financial impact on 2016 results. Additional details on the impact of the new rule will be discussed at today’s quarterly conference call.

Updated 2016 Outlook
As a result of currency headwinds, total and net revenue guidance are being adjusted. EPS guidance remains unchanged. The resulting revised guidance is below.

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