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Actionable news in HPY: HEARTLAND PAYMENT SYSTEMS Inc,

Heartland Payment Systems 90 Nassau Street

The following excerpt is from the company's SEC filing.

Princeton, NJ 08542 888.798.3131

HeartlandPaymentSystems.com

Heartland Payment Systems Reports Record Third Quarter 2015 Adjusted Earnings Per Share of $0.79

PRINCETON, N.J.--(BUSINESS WIRE)-- Heartland Payment Systems, Inc. (NYSE: HPY), one of the nation's largest payment

processors, today announced record third quarter Adjusted Net Income and Adjusted Earnings per Share of $29.7 million and $0.79, respectively, for the quarter ended September 30, 2015. Adjusted Net Income and Adjusted Earnings per Share were $24.8 million and $0.68, respectively, for the quarter ended September 30, 20 14. For the third quarter of 2015, Heartland reported GAAP Net Income of $23.9 million, or $0.64 per share. Adjusted Net Income and Adjusted Earnings per Share are non-GAAP measures that are detailed at the end of this press release in the “Reconciliation of Non-GAAP Financial Measures.”

Highlights for the third quarter of 2015 include:

Small and Mid-Sized Enterprise (SME) transaction processing volume was an all-time quarterly record $24.5 billion, up 13.1% from the third quarter of 2014, the fifth consecutive quarter of double-digit growth

Quarterly Net Revenue was a record $214.6 million, up 26.7% from the third quarter of 2014, with organic net revenue growth of 11.3% for the quarter

Net Revenue for our Non-Payment Processing segments grew by 61% in the third quarter of 2015 including the benefit of acquisitions; excluding such acquisitions, organic net revenue grew by over 8%

New margin installed was an all-time record $27.7 million, a 29.5% increase from the third quarter of 2014, and the fastest rate of new margin installed growth since the fourth quarter of 2013

Same store sales were up 4.1% and net volume attrition was 9.1%, continuing their trend of steady improvement

Operating results for the third quarter of 2015 include:

Stock compensation expense of $4.4 million and acquisition-related intangible amortization of $5.1 million, increases of $1.0 million and $1.6 million, respectively, compared to the third quarter of 2014

Increases in sales compensation and general incentive compensation in the third quarter of 2015, both due to improved financial performance

There was no impact from the Company's former Leaf business in the third quarter of 2015, whereas a year ago there was a net $0.05 per share benefit to both GAAP and Adjusted Earnings

Robert O. Carr, Chairman and CEO, said, "The strong momentum in new margin installed, transaction processing and net revenue growth continues to drive record earnings. Our new business growth was outstanding this quarter, with new margin installed up nearly 30%, one of the fastest rates of new business growth in many years, and this growth was accomplished from a much higher base. Our success this quarter was driven by the growth and productivity of our sales organization, our focus on complementary acquisitions, an improvement in consumer spending, and our innovative new technologies and products, such as Heartland Secure. We also had our best operating margin in nearly two years, consistent with our expectations and a reflection of the solid operating leverage inherent in our business model. We will continue to invest in our strategy, providing small and mid-sized merchants the same best-in-class solutions as the largest merchants, to help them improve their business, while building the value of the Heartland franchise."

SME card transaction processing volume for the quarter was up 13.1% compared to the third quarter of 2014, driven by new margin installs, growth in same store sales and improved net volume attrition. SME card transaction processing volume in both the third quarters of 2015 and 2014 includes Visa, Mastercard, Discover and Amex OptBlue, the latter of which we first began including in volume in the third quarter of 2014. Our total non-card segments grew their revenue by 61% for the quarter as a result of both organic and acquisition related growth.

The Adjusted Operating Margin for the third quarter of 2015 was 24.3%, a 230 basis point improvement from the third quarter of 2014. Margin expansion primarily reflected increased operating leverage as net revenue growth remains at levels consistent with the first half of the year while the planned rate of growth of investment in security, marketing, Heartland Commerce as well as incentive compensation slowed from the pace of the first half of 2015.

For the third quarter of 2014, both GAAP and Adjusted Net Income per share include a net $0.05 per share benefit related to the former Leaf business, primarily a $3.6 million one-time gain related to the settlement of an earn out obligation. Leaf was completely wound down as of the second quarter of 2015. Since March 31, 2015, the last quarter in which cash was used for acquisitions, we have reduced total debt by $90 million.

Mr. Carr continued, “The implementation of new EMV standards, the growing adoption of integrated point-of-sale technology...


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