PLANO, Texas, April 25, 2019 /PRNewswire/ -- Alliance Data
Systems Corporation (NYSE: ADS), a leading global provider of
data-driven marketing and loyalty solutions, today announced
results for the quarter ended March 31,
2019.
SUMMARY
|
Quarter Ended
March 31,
|
(in millions,
except per share amounts)
|
2019
|
2018
|
%
Change
|
Revenue
|
$1,334
|
$1,382
|
-3%
|
Income from
continuing operations
|
$174
|
$176
|
-1%
|
Net income
|
$149
|
$164
|
-9%
|
Income from
continuing operations per diluted share ("EPS")
|
$3.28
|
$3.17
|
+3%
|
Net income per
diluted share
|
$2.80
|
$2.95
|
-5%
|
Diluted shares
outstanding
|
53.2
|
55.7
|
|
*******************************
|
|
|
|
Supplemental Non-GAAP
Metrics (a):
|
|
|
|
Adjusted
EBITDA
|
$423
|
$435
|
-3%
|
Adjusted
EBITDA, net of funding costs
("adjusted EBITDA, net")
|
$317
|
$347
|
-9%
|
Core earnings
per diluted share ("core EPS")
|
$3.72
|
$3.95
|
-6%
|
|
(a) See "Financial Measures"
for a discussion of non-GAAP financial measures.
|
Ed Heffernan, president and chief
executive officer of Alliance Data, commented, "The first quarter
came in as expected as we execute our shift to more attractive
verticals and clients within Card Services. Prior to the
reclassification of Epsilon® to discontinued operations,
our revenue decreased 3 percent to $1.8
billion and core EPS decreased 8 percent to $4.07. Both are consistent with guidance for the
first quarter of revenue down mid-single digits and core EPS down
high-single digits.
"As previously announced, the Company has signed a definitive
agreement to sell Epsilon for $4.4
billion. After taxes and transaction costs, net proceeds are
expected to be approximately $3.5
billion. The Company expects to use transaction proceeds to
pay down at least $1.9 billion of
senior debt (approximately $102
million in annual cash interest expense savings) and
repurchase shares. These actions, coupled with meaningful expense
reductions at corporate, are expected to result in a pro forma
full–year run-rate1 in excess of our original
$22.00 core EPS guidance."
Heffernan continued, "Moving beyond Epsilon, the Company has
additional initiatives underway which will further simplify the
narrative as well as focus capital on the highest earning and
growth assets. Further information will be provided when
appropriate."
1 Assumes use of
proceeds/expense reductions are effectuated 1/1/2019.
CONSOLIDATED RESULTS
Revenue decreased 3 percent to $1.33
billion, while EPS increased 3 percent to $3.28 for the first quarter of 2019. The
effective tax rate for EPS was approximately 16 percent, compared
to approximately 27 percent for the first quarter of 2018, due to
the release of certain tax reserves. Core EPS decreased 6 percent
to $3.72 for the first quarter of
2019, while adjusted EBITDA, net decreased 9 percent to
$317 million for the first quarter of
2019.
SEGMENT RESULTS
|
Quarter Ended
March 31,
|
(in
millions)
|
2019
|
2018
|
%
Change
|
Revenue:
|
|
|
|
LoyaltyOne
|
$204
|
$226
|
-10%
|
Card
Services
|
$1,130
|
$1,155
|
-2%
|
Total revenue
|
$1,334
|
$ 1,381
|
-3%
|
|
|
|
|
Adjusted EBITDA,
net:
|
|
|
|
LoyaltyOne
|
$55
|
$54
|
+2%
|
Card
Services
|
$295
|
$319
|
-7%
|
Corporate/other
|
($33)
|
($26)
|
|
Total adjusted EBITDA,
net
|
$317
|
$347
|
-9%
|
|
|
|
|
Discontinued
Operations:
|
|
|
|
Epsilon
revenue
|
$508
|
$509
|
0%
|
Epsilon
adjusted EBITDA
|
$80
|
$92
|
-13%
|
Epsilon core
EPS (a)
|
$0.35
|
$0.49
|
-29%
|
|
(a)
Interest expense associated with the senior debt to be retired
has been
allocated
to discontinued operations for both periods presented.
|
LoyaltyOne®: Revenue decreased 10
percent to $204 million, while
adjusted EBITDA increased 2 percent to $55
million for the quarter ended March
31, 2019. Revenue was flat with the prior year when adjusted
for unfavorable foreign exchange rates and additional product
outsourcing, whereby redemptions are now recorded as net revenue.
AIR MILES® reward miles issued increased 3 percent for
the first quarter of 2019, primarily due to strength in the grocery
vertical. BrandLoyalty revenue increased 3 percent on a constant
currency basis. During the quarter, BrandLoyalty implemented
several initiatives to lower its fixed operating costs resulting in
approximately $8 million in
restructuring costs.
Card Services: Revenue decreased 2 percent to
$1.13 billion and adjusted EBITDA,
net decreased 7 percent to $295
million for the first quarter of 2019. Gross yields
decreased 70 basis points to 24.1 percent on normalized average
card receivables growth of 1 percent (card receivables plus
held-for-sale receivables). The loan loss provision decreased 25
percent to $252 million as a result
of lower reservable card receivables and improving principal loss
rate trends. Operating expenses increased $65 million to $505
million, primarily due to an approximate $40 million increase in mark-to-market charges on
held-for-sale receivables.
2019 Guidance Adjusted for Discontinued Operations
Revised guidance is revenue of $5.84
billion, up 4 percent over 2018, and core EPS of
$18.47, down 4 percent compared to
2018. Core EPS growth is expected to be muted, especially in the
first-half of the year, as the Company completes the divestiture of
non-strategic held-for-sale portfolios, which began in the
second-half of 2018.
Revised guidance does not include the anticipated benefits of
share repurchases as part of the use of proceeds from the expected
Epsilon sale, nor related lower corporate expense. The Company
expects the benefits to be accretive on a pro forma run-rate basis
to the original core EPS guidance of $22.00 for 2019.
Forward-Looking Statements
This release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934. Forward-looking
statements give our expectations or forecasts of future events and
can generally be identified by the use of words such as "believe,"
"expect," "anticipate," "estimate," "intend," "project," "plan,"
"likely," "may," "should" or other words or phrases of similar
import. Similarly, statements that describe our business strategy,
outlook, objectives, plans, intentions or goals also are
forward-looking statements. Examples of forward-looking
statements include, but are not limited to, statements we make
regarding additional strategic initiatives, the pending Epsilon
transaction and whether closing conditions for such transaction
will be satisfied or waived and the expected use of proceeds
therefrom, our expected operating results, future economic
conditions including currency exchange rates, future dividend
declarations and the guidance we give with respect to our
anticipated financial performance.
We believe that our expectations are based on reasonable
assumptions. Forward-looking statements, however, are subject to a
number of risks and uncertainties that could cause actual results
to differ materially from the projections, anticipated results or
other expectations expressed in this release, and no assurances can
be given that our expectations will prove to have been correct.
These risks and uncertainties include, but are not limited to,
factors set forth in the Risk Factors section in our Annual Report
on Form 10-K for the most recently ended fiscal year, which may be
updated in Item 1A of, or elsewhere in, our Quarterly Reports on
Form 10-Q filed for periods subsequent to such Form 10-K. Further
risks and uncertainties include, but are not limited to, the
pending transaction involving Epsilon, whether such transaction
will be completed, the possibility that closing conditions for the
transaction may not be satisfied or waived, the impact of
additional strategic initiatives on us or our business if any
transactions are undertaken, and whether the benefits of such
transactions can be achieved.
Our forward-looking statements speak only as of the date made,
and we undertake no obligation, other than as required by
applicable law, to update or revise any forward-looking statements,
whether as a result of new information, subsequent events,
anticipated or unanticipated circumstances or otherwise.
Financial Measures
In addition to the results presented in accordance with
generally accepted accounting principles, or GAAP, the Company may
present financial measures that are non-GAAP measures, such as
constant currency financial measures, adjusted EBITDA, adjusted
EBITDA margin, adjusted EBITDA, net of funding costs, core earnings
and core earnings per diluted share (core EPS). Constant currency
excludes the impact of fluctuations in foreign exchange rates. The
Company calculates constant currency by converting our current
period local currency financial results using the prior period
exchange rates. The Company uses adjusted EBITDA and adjusted
EBITDA, net as an integral part of internal reporting to measure
the performance and operational strength of reportable segments and
to evaluate the performance of senior management. Adjusted EBITDA
eliminates the uneven effect across all reportable segments of
non-cash depreciation of tangible assets and amortization of
intangible assets, including certain intangible assets that were
recognized in business combinations, and the non-cash effect of
stock compensation expense. Similarly, core earnings and core EPS
eliminate non-cash or non-operating items, including, but not
limited to, stock compensation expense, amortization of purchased
intangibles, restructuring or strategic transaction costs,
amortization of debt issuance and hedging costs. The Company
believes that these non-GAAP financial measures, viewed in addition
to and not in lieu of the Company's reported GAAP results, provide
useful information to investors regarding the Company's performance
and overall results of operations.
Reconciliation of Non-GAAP Financial Measures
Reconciliations to comparable GAAP financial measures are
available in the accompanying schedules, which are posted as part
of this earnings release in both the News and Investors sections on
the Company's website (www.alliancedata.com). No reconciliation is
provided with respect to forward-looking annual guidance for 2019
core EPS as the Company cannot reliably predict all necessary
components or their impact to reconcile core EPS to GAAP EPS
without unreasonable effort. The events necessitating a non-GAAP
adjustment are inherently unpredictable and may have a material
impact on the Company's future results.
The financial measures presented are consistent with the
Company's historical financial reporting practices. Core earnings
and core EPS represent performance measures and are not intended to
represent liquidity measures. The non-GAAP financial measures
presented herein may not be comparable to similarly titled measures
presented by other companies, and are not identical to
corresponding measures used in other various agreements or public
filings.
Conference
Call
Alliance Data will host a conference call on Thursday, April 25, 2019 at 8:30 a.m. (Eastern Time) to discuss the Company's
first-quarter 2019 results. The conference call will be available
via the Internet at www.alliancedata.com. There will be several
slides accompanying the webcast. Please go to the website at least
15 minutes prior to the call to register, download and install any
necessary software. The recorded webcast will also be available on
the Company's website.
If you are unable to participate in the conference call, a
replay will be available. To access the replay, please dial (855)
859-2056 or (404) 537-3406 and enter "7599344". The replay will be
available at approximately 11:45 a.m.
(Eastern Time) on Thursday, April 25, 2019.
About Alliance Data
Alliance Data® (NYSE: ADS) is a leading global
provider of data-driven marketing and loyalty solutions serving
large, consumer-based industries. The Company creates and deploys
customized solutions, enhancing the critical customer marketing
experience; the result is measurably changing consumer behavior
while driving business growth and profitability for some of today's
most recognizable brands. Alliance Data helps its clients create
and increase customer loyalty through solutions that engage
millions of customers each day across multiple touch points using
traditional, digital, mobile and emerging technologies. An S&P
500, FORTUNE 500 and FORTUNE 100 Best Companies to Work For company
headquartered in Plano, Texas,
Alliance Data consists of three businesses that together employ
approximately 20,000 associates at more than 100 locations
worldwide.
Alliance Data's card services business is a provider of
market-leading private label, co-brand, and business credit card
programs. Epsilon® is a leading provider of
multichannel, data-driven technologies and marketing services, and
also includes Conversant®, a leader in personalized
digital marketing. LoyaltyOne® owns and operates the AIR
MILES® Reward Program, Canada's most recognized loyalty program, and
Netherlands-based BrandLoyalty, a
global provider of tailor-made loyalty programs for grocers.
Follow Alliance Data on Twitter, Facebook, LinkedIn, Instagram
and YouTube.
ALLIANCE DATA SYSTEMS
CORPORATION
|
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
|
(In millions, except
per share amounts)
|
(Unaudited)
|
|
|
|
Three Months
Ended
March
31,
|
|
|
|
2019
|
|
|
2018
|
|
|
|
Revenue
|
|
$
|
1,334.2
|
|
|
$
|
1,381.7
|
|
Operating
expenses:
|
|
Cost of
operations
|
|
|
678.8
|
|
|
|
623.0
|
|
Provision for loan
loss
|
|
|
252.1
|
|
|
|
337.7
|
|
Depreciation and
amortization
|
|
|
46.4
|
|
|
|
48.7
|
|
Total operating
expenses
|
|
|
977.3
|
|
|
|
1,009.4
|
|
Operating
income
|
|
|
356.9
|
|
|
|
372.3
|
|
Interest expense,
net:
|
|
Securitization funding
costs
|
|
|
57.3
|
|
|
|
52.1
|
|
Interest expense on
deposits
|
|
|
48.7
|
|
|
|
35.5
|
|
Interest expense on
long-term and other debt, net
|
|
|
43.5
|
|
|
|
44.2
|
|
Total interest
expense, net
|
|
|
149.5
|
|
|
|
131.8
|
|
Income from
continuing operations before income taxes
|
|
$
|
207.4
|
|
|
$
|
240.5
|
|
Income tax
expense
|
|
|
33.1
|
|
|
|
64.0
|
|
Income from
continuing operations
|
|
|
174.3
|
|
|
|
176.5
|
|
Loss from
discontinued operations, net of taxes
|
|
|
(25.2)
|
|
|
|
(12.6)
|
|
Net income
|
|
$
|
149.1
|
|
|
$
|
163.9
|
|
|
|
|
|
Per share
data:
|
|
|
|
Weighted average
shares outstanding – basic
|
|
|
53.0
|
|
|
|
55.4
|
|
Weighted average
shares outstanding - diluted
|
|
|
53.2
|
|
|
|
55.7
|
|
|
|
Basic – Income
from continuing operations
|
|
$
|
3.29
|
|
|
$
|
3.19
|
|
Basic – Loss from
discontinued operations
|
|
|
(0.48)
|
|
|
|
(0.23)
|
|
Basic – Net
income
|
|
$
|
2.81
|
|
|
$
|
2.96
|
|
|
|
|
|
|
|
|
|
|
Diluted –
Income from continuing operations
|
|
$
|
3.28
|
|
|
$
|
3.17
|
|
Diluted – Loss from
discontinued operations
|
|
|
(0.48)
|
|
|
|
(0.22)
|
|
Diluted – Net
income
|
|
$
|
2.80
|
|
|
$
|
2.95
|
|
|
|
|
|
ALLIANCE DATA SYSTEMS
CORPORATION
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(In
millions)
|
(Unaudited)
|
|
|
|
March
31,
2019
|
|
December 31,
2018
|
|
Assets
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
3,685.0
|
|
$
|
3,817.4
|
|
Credit card and loan
receivables:
|
|
|
|
|
|
|
|
Credit card and loan
receivables
|
|
|
16,850.5
|
|
|
17,855.0
|
|
Allowance for loan
loss
|
|
|
(1,021.1)
|
|
|
(1,038.3)
|
|
Credit card and loan
receivables, net
|
|
|
15,829.4
|
|
|
16,816.7
|
|
Credit card
receivables held for sale
|
|
|
1,848.9
|
|
|
1,951.6
|
|
Redemption settlement
assets, restricted
|
|
|
576.1
|
|
|
558.6
|
|
Right of use assets -
operating
|
|
|
271.2
|
|
|
—
|
|
Intangible assets,
net
|
|
|
189.6
|
|
|
217.4
|
|
Goodwill
|
|
|
950.0
|
|
|
954.8
|
|
Other
assets
|
|
|
1,858.2
|
|
|
1,913.8
|
|
Assets of
discontinued operations
|
|
|
4,224.7
|
|
|
4,157.4
|
|
Total
assets
|
|
$
|
29,433.1
|
|
$
|
30,387.7
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
Deferred
revenue
|
|
$
|
877.3
|
|
$
|
875.3
|
|
Deposits
|
|
|
11,292.0
|
|
|
11,793.7
|
|
Non-recourse
borrowings of consolidated securitization entities
|
|
|
6,775.5
|
|
|
7,651.7
|
|
Long-term and other
debt
|
|
|
5,881.5
|
|
|
5,725.4
|
|
Operating lease
liabilities
|
|
|
321.2
|
|
|
—
|
|
Other
liabilities
|
|
|
1,654.0
|
|
|
1,703.8
|
|
Liabilities of
discontinued operations
|
|
|
392.1
|
|
|
305.7
|
|
Total
liabilities
|
|
|
27,193.6
|
|
|
28,055.6
|
|
Stockholders'
equity
|
|
|
2,239.5
|
|
|
2,332.1
|
|
Total liabilities and
stockholders' equity
|
|
$
|
29,433.1
|
|
$
|
30,387.7
|
|
|
ALLIANCE DATA SYSTEMS
CORPORATION
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(In
millions)
|
(Unaudited)
|
|
|
|
Three Months
Ended
March 31,
|
|
|
|
2019
|
|
|
2018
|
|
|
|
|
|
Cash Flows from
Operating Activities:
|
|
Net income
|
|
$
|
149.1
|
|
|
$
|
163.9
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
118.9
|
|
|
|
121.7
|
|
Deferred income
taxes
|
|
|
(35.0)
|
|
|
|
(16.2)
|
|
Provision for loan
loss
|
|
|
252.1
|
|
|
|
337.7
|
|
Non-cash stock
compensation
|
|
|
21.1
|
|
|
|
25.5
|
|
Amortization of
deferred financing costs
|
|
11.0
|
|
|
|
11.4
|
|
Change in operating
assets and liabilities
|
|
8.7
|
|
|
|
(108.0)
|
|
Originations of loan
receivables held for sale
|
|
—
|
|
|
|
(2,271.7)
|
|
Sales of loan
receivables held for sale
|
|
—
|
|
|
|
2,312.8
|
|
Other
|
|
|
84.9
|
|
|
|
72.8
|
|
Net cash provided by
operating activities
|
|
610.8
|
|
|
|
649.9
|
|
|
|
Cash Flows from
Investing Activities:
|
|
Change in redemption
settlement assets
|
|
(0.1)
|
|
|
|
(14.5)
|
|
Change in credit card
and loan receivables
|
|
758.2
|
|
|
|
470.5
|
|
Capital
expenditures
|
|
|
(38.7)
|
|
|
|
(44.7)
|
|
Other
|
|
|
(1.9)
|
|
|
|
(18.4)
|
|
Net cash provided by
investing activities
|
|
717.5
|
|
|
|
392.9
|
|
|
|
Cash Flows from
Financing Activities:
|
|
Borrowings under debt
agreements
|
|
|
1,045.1
|
|
|
|
685.0
|
|
Repayments of
borrowings
|
|
|
(870.9)
|
|
|
|
(706.5)
|
|
Net decrease in
deposits
|
|
|
(502.6)
|
|
|
|
(448.4)
|
|
Non-recourse
borrowings of consolidated securitization entities
|
|
1,122.2
|
|
|
|
905.0
|
|
Repayments/maturities
of non-recourse borrowings of consolidated securitization
entities
|
|
(1,997.5)
|
|
|
|
(1,590.0)
|
|
Payment of deferred
financing costs
|
|
|
(5.4)
|
|
|
|
(3.5)
|
|
Purchase of treasury
shares
|
|
|
(222.8)
|
|
|
|
—
|
|
Dividends
paid
|
|
|
(33.9)
|
|
|
|
(31.7)
|
|
Other
|
|
|
(17.2)
|
|
|
|
(23.7)
|
|
Net cash used in
financing activities
|
|
|
(1,483.0)
|
|
|
|
(1,213.8)
|
|
|
|
Effect of exchange
rate changes on cash, cash equivalents and restricted
cash
|
|
3.0
|
|
|
|
(1.7)
|
|
Change in cash, cash
equivalents and restricted cash
|
|
(151.7)
|
|
|
|
(172.7)
|
|
Cash, cash
equivalents and restricted cash at beginning of period
|
|
3,967.7
|
|
|
|
4,314.7
|
|
Cash, cash equivalents
and restricted cash at end of period
|
$
|
3,816.0
|
|
|
$
|
4,142.0
|
|
|
|
|
|
|
|
Note: The cash
flow statement is presented with the combined cash flows from
discontinued operations with cash flows from continuing operations
within each cash flow statement category.
|
ALLIANCE DATA SYSTEMS
CORPORATION
|
SUMMARY FINANCIAL
HIGHLIGHTS
|
(In
millions)
|
(Unaudited)
|
|
|
|
Three Months
Ended
March 31,
|
|
|
|
|
|
|
|
2019
|
|
|
2018
|
|
|
Change
|
|
Segment
Revenue:
|
|
|
|
LoyaltyOne
|
|
$
|
203.8
|
|
$
|
226.3
|
|
|
(10)
|
|
%
|
Card
Services
|
|
|
1,130.4
|
|
|
1,155.2
|
|
|
(2)
|
|
|
Corporate/Other
|
|
|
—
|
|
|
0.2
|
|
|
nm
|
*
|
|
Total
|
|
$
|
1,334.2
|
|
$
|
1,381.7
|
|
|
(3)
|
|
%
|
Segment Adjusted
EBITDA, net:
|
|
|
LoyaltyOne
|
|
$
|
55.1
|
|
$
|
53.9
|
|
|
2
|
|
%
|
Card
Services
|
|
|
294.9
|
|
|
318.6
|
|
|
(7)
|
|
|
Corporate/Other
|
|
|
(33.5)
|
|
|
(25.5)
|
|
|
(30)
|
|
|
Total
|
|
$
|
316.5
|
|
$
|
347.0
|
|
|
(9)
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Key Performance
Indicators:
|
|
|
|
Credit
sales
|
|
$
|
6,315
|
|
$
|
6,806
|
|
|
(7)
|
|
%
|
Credit sales -
active
|
|
$
|
5,884
|
|
$
|
5,636
|
|
|
4
|
|
%
|
Average
receivables
|
|
$
|
16,850
|
|
$
|
17,722
|
|
|
(5)
|
|
%
|
Gross yield
|
|
|
24.1%
|
|
|
24.8%
|
|
|
(0.7)
|
|
%
|
Net principal loss
rate
|
|
|
6.4%
|
|
|
6.7%
|
|
|
(0.3)
|
|
%
|
Delinquency
rate
|
|
|
5.2%
|
|
|
5.3%
|
|
|
(0.1)
|
|
%
|
AIR MILES reward miles
issued
|
|
1,258
|
|
|
1,226
|
|
|
3
|
|
%
|
AIR MILES reward miles
redeemed
|
|
1,089
|
|
|
1,178
|
|
|
(8)
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* nm-not
meaningful
|
ALLIANCE DATA SYSTEMS
CORPORATION
|
RECONCILIATION OF
NON-GAAP INFORMATION
|
(In millions, except
per share amounts)
|
(Unaudited)
|
|
|
|
Three Months
Ended
March 31,
|
|
|
|
2019
|
|
|
2018
|
|
|
|
|
|
Adjusted EBITDA
and Adjusted EBITDA, net:
|
|
Income from
continuing operations
|
|
$
|
174.3
|
|
|
$
|
176.5
|
|
Income tax
expense
|
|
|
33.1
|
|
|
|
64.0
|
|
Total interest
expense, net
|
|
|
149.5
|
|
|
|
131.8
|
|
Depreciation and other
amortization
|
|
|
20.6
|
|
|
|
19.3
|
|
Amortization of
purchased intangibles
|
|
|
25.8
|
|
|
|
29.4
|
|
Stock compensation
expense
|
|
|
11.3
|
|
|
|
13.6
|
|
Restructuring charges
(1)
|
|
|
7.9
|
|
|
|
—
|
|
Adjusted
EBITDA
|
|
$
|
422.5
|
|
|
$
|
434.6
|
|
Less: Funding
costs (2)
|
|
|
106.0
|
|
|
|
87.6
|
|
Adjusted EBITDA, net
of funding costs
|
|
$
|
316.5
|
|
|
$
|
347.0
|
|
|
|
Core
Earnings:
|
|
Income from
continuing operations
|
|
$
|
174.3
|
|
|
$
|
176.5
|
|
Add back: non-cash/
non-operating items:
|
|
|
|
|
|
|
|
|
Stock compensation
expense
|
|
|
11.3
|
|
|
|
13.6
|
|
Amortization of
purchased intangibles
|
|
|
25.8
|
|
|
|
29.4
|
|
Non-cash interest
(3)
|
|
|
9.5
|
|
|
|
9.9
|
|
Restructuring charges
(1)
|
|
|
7.9
|
|
|
|
—
|
|
Income tax effect
(4)
|
|
|
(31.0)
|
|
|
|
(9.4)
|
|
Core
earnings
|
|
$
|
197.8
|
|
|
$
|
220.0
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding - diluted
|
|
|
53.2
|
|
|
|
55.7
|
|
Core earnings per
share - diluted
|
|
$
|
3.72
|
|
|
$
|
3.95
|
|
|
|
|
|
(1) Represents costs
associated with the wind-down of Merison, a Netherlands-based
loyalty marketer
within
BrandLoyalty.
|
(2) Represents interest
expense on deposits and securitization funding costs.
|
(3) Represents
amortization of debt issuance costs.
|
(4) Represents the tax
effect including the related non-GAAP measure adjustments using the
expected
effective
annual tax rate.
|
|
|
Three Months Ended March 31, 2019
|
|
|
|
LoyaltyOne
|
|
|
Card
Services
|
|
|
Corporate/
Other
|
|
|
Total
|
|
Operating income
(loss)
|
|
$
|
24.1
|
|
|
$
|
372.9
|
|
|
$
|
(40.1)
|
|
|
$
|
356.9
|
|
Depreciation and
amortization
|
|
20.1
|
|
|
|
24.3
|
|
|
|
2.0
|
|
|
|
46.4
|
|
Stock compensation
expense
|
|
3.0
|
|
|
|
3.7
|
|
|
|
4.6
|
|
|
|
11.3
|
|
Restructuring
charges
|
|
|
7.9
|
|
|
|
—
|
|
|
|
—
|
|
|
|
7.9
|
|
Adjusted
EBITDA
|
|
|
55.1
|
|
|
|
400.9
|
|
|
|
(33.5)
|
|
|
|
422.5
|
|
Less: Funding
costs
|
|
|
—
|
|
|
|
106.0
|
|
|
|
—
|
|
|
|
106.0
|
|
Adjusted EBITDA,
net
|
|
$
|
55.1
|
|
|
$
|
294.9
|
|
|
$
|
(33.5)
|
|
|
$
|
316.5
|
|
|
|
|
Three Months Ended
March 31, 2018
|
|
|
|
LoyaltyOne
|
|
|
Card
Services
|
|
|
Corporate/
Other
|
|
|
Total
|
|
Operating income
(loss)
|
|
$
|
28.3
|
|
|
$
|
377.0
|
|
|
$
|
(33.0)
|
|
|
$
|
372.3
|
|
Depreciation and
amortization
|
|
22.0
|
|
|
|
24.8
|
|
|
|
1.9
|
|
|
|
48.7
|
|
Stock compensation
expense
|
|
3.6
|
|
|
|
4.4
|
|
|
|
5.6
|
|
|
|
13.6
|
|
Adjusted
EBITDA
|
|
|
53.9
|
|
|
|
406.2
|
|
|
|
(25.5)
|
|
|
|
434.6
|
|
Less: Funding
costs
|
|
|
—
|
|
|
|
87.6
|
|
|
|
—
|
|
|
|
87.6
|
|
Adjusted EBITDA,
net
|
|
$
|
53.9
|
|
|
$
|
318.6
|
|
|
$
|
(25.5)
|
|
|
$
|
347.0
|
|
Contacts:
|
Investors/Analysts
|
|
Tiffany
Louder
|
|
Alliance
Data
|
|
214-494-3048
|
|
Tiffany.Louder@alliancedata.com
|
|
|
|
Media
|
|
Shelley Whiddon
|
|
Alliance
Data
|
|
214-494-3811
|
|
Shelley.Whiddon@alliancedata.com
|
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SOURCE Alliance Data Systems Corporation