Heartland Payment Systems Inc., one of the few publicly traded independent sales organizations, today reported its revenues jumped 39% in the first quarter, to $236.8 million, on a 34% increase in transaction volume, to $9.2 billion. Net income for the period came to $4.39 million, a 63% increase. The Princeton, N.J.-based company says it now processes card transactions for 116,400 mostly small and mid-size merchant locations, up 24.1% from the same time a year ago. Helping to drive volume and revenue, Heartland reports, is that same-store sales at these merchant outlets increased 7.1% in the quarter. The company's financials indicate its interchange expense rose 41% over the year-ago period, to $172.2 million, or 1.87% of total processing volume. Referring to major investments in technology, Heartland chief executive Robert O. Carr said in a statement that 76% of new merchants and 59% of overall transactions during the quarter were processed on HPS Exchange, an internally built front-end platform to handle authorization and other functions. At the same time, the company “committed significant resources,” Carr said, to converting merchants to its back-end system, known as Passport, for settlement processing. Some 97% of Heartland's merchants are now on the Passport platform, Carr said, “although our first-quarter expenses rose as we expedited the process.” On the marketing side, Heartland increased its direct sales force to a head count of 1,074, up 64 from the end of 2005. Total first-quarter expenses grew 40%, to $230.5 million. A member-service provider for KeyBank N.A., Cleveland, 9-year-old Heartland went public last summer. In February, it acquired Debitek, a Chattanooga, Tenn., provider of closed-loop stored-value systems, from terminal-maker Ingenico Corp. (Digital Transactions News, Feb. 13). A month earlier, it bought a stake in Parcxmart Technologies Inc., which provides card-based payment systems for parking meters and merchants selling small-ticket merchandise.
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