Magazine article American Banker

Heartland, 4Q Profits Up, Cites Sales Force Growth

Magazine article American Banker

Heartland, 4Q Profits Up, Cites Sales Force Growth

Article excerpt

Heartland Payment Systems Inc. reported strong fourth-quarter results, despite investing heavily to convert almost its entire merchant portfolio to its proprietary back-end system.

Earnings climbed 20% from a year earlier, to $6.6 million, the Princeton, N.J., merchant acquirer said Thursday. Revenue grew 27%, to $288 million.

Robert Carr, Heartland's chairman and chief executive, attributed much of the growth to a thriving sales force, which grew over 36% last year, to nearly 1,400 representatives.

"The tremendous growth in our sales force over the last couple of quarters is just the most tangible sign of our efforts to position our entire sales organization to sustain our momentum and effectively manage a much larger merchant platform," Mr. Carr said during a conference call.

The fourth quarter was the second-biggest quarter in Heartland's history and "lifted our total revenues for the year over $1 billion for the first time," he said.

For the full year, revenue rose 31%, to $1.1 billion, and net income grew 49%, to $28.5 million. The number of merchant customers grew 21%, to 137,400 at yearend.

However, Heartland said its fourth-quarter operating margin fell 40 basis points, to 17.9% of net revenue, because of seasonal weakness and some one-time costs associated with converting the merchant portfolio to the proprietary system, Passport. Heartland previously had outsourced its processing to First Data Corp. …

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