SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

 

Date of report (Date of earliest event reported):

January 18, 2002

 

 

ALLIANCE DATA SYSTEMS CORPORATION

(Exact Name of Registrant as Specified in Charter)

 

 

 

 

 

17655 WATERVIEW PARKWAY

DALLAS, TEXAS 75252

(Address and Zip Code of Principal Executive Offices)

 

 

(972) 348-5100

(Registrant’s telephone number, including area code)

 

NOT APPLICABLE

(Former name or former address, if changed since last report)

 

 

ITEM 7.  FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.

 

         The following financial statements, pro forma financial information and exhibits, if any, are being provided as part of this report in accordance with the instructions to this item.

 

         (a)    FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED.

 

                None.

 

         (b)    PRO FORMA FINANCIAL INFORMATION.

 

                None.

 

         (c)    EXHIBITS.

 

                99.1 Web site investor presentation

 

ITEM 9. REGULATION FD DISCLOSURE.

 

          Alliance Data Systems Corporation is furnishing this investor presentation that will be available via its web site, http://www.alliancedatasystems.com, beginning January 18, 2002. The presentation is attached to this Form 8-K as Exhibit 99.1 and is incorporated herein by reference.

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

	Alliance Data Systems Corporation
Date:  January 18, 2002	By:	/s/ Edward J. Heffernan
		Edward J. Heffernan
		Executive Vice President and
		Chief Financial Officer

 

EXHIBIT INDEX

 

EXHIBIT NUMBER			DESCRIPTION
99.1		Web site presentation

 

 

Alliance Data Systems

NYSE : ADS

 

January 2002

 

 

 

Safe Harbor Statement/Forward Looking Statement

 

Statements contained in this presentation which are not historical facts may be forward-looking statements, as the term is defined in the Private Litigation Reform Act of 1995. In some cases, you can identify forward- looking statements by terminology such as “anticipate”, “estimate”, “expect”, “project”, “intend”, “plan”, “believe” and other words and terms of similar meaning in connection with any discussion of future operating or financial performance. In particular, these include, among other things, statements relating to growth strategy, global expansion, use of proceeds, dividend policy, projected capital expenditures, sales and marketing expenses, research and development expenditures, other costs and expenses, revenue, profitability, liquidity and capital resources, and development. These statements are based on certain assumptions made by Alliance Data Systems based on its experience and perception of historical trends, current conditions, expected future developments, and other factors it believes are appropriate under the circumstances. Any and all of the forward- looking statements can be affected by inaccurate assumptions we might make or by known or unknown risks and uncertainties. Many factors, including the risks outlined in the company’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission, will be important in determining future results. Actual results may vary materially.

 

 

 

Alliance Data: Integration of Transaction

Processing and Marketing Services

 

•Build and Strengthen Loyal Relationships for Our Clients

•Focus on 300 Specialized Relationships, not "Commodity" Items

•Offer Full Suite of Services

•Transaction Processing Services

•Credit Services

•Loyalty and Marketing Services

•Capitalize on Strong Growth Trends

•Electronic Transactions

•One-to-One Marketing

•Outsourcing.

 

 

 

Transaction Services

(50% of Company)

 

 

 

 

 

Credit Services

(25% of Company)

 

•Private Label Credit Cards

•Underwriting and Risk Management

•Merchant Processing

•Receivables Financing

 

 

Marketing Services

(25% of Company)

•Canada — Coalition Loyalty (Air Miles) Program

•U. S.              — One- to- One Loyalty Programs

                                                — Database Marketing Services

 

 

 

 

Experienced Management Team
Name		Responsibility		Years of Experience		Background
Mike Parks		Chairman, CEO and President		25		First Data
Ed Heffernan		EVP and CFO		16		First Data, Citigroup, CS First Boston
Mike Beltz		President, Transaction Services		19		First Data
Ivan Szeftel		President, Credit Services		19		Charming Shoppes
John Scullion		President, Loyalty Marketing		14		The Rider Group
Steve Walensky		EVP and CIO		25		First Data, Visa International
Dwayne Tucker		EVP and CAO		23		Northwest Airlines, First Data
Alan Utay		EVP and General Counsel		12		Akin Gump Strauss Hauser and Feld

 

 

 

Financial Themes

 

 

 

- Growth

- Visibility & Predictability

- Operating Leverage

- Liquidity

 

 

Growth

Five Year Period

 

 

•    Organic Targets of  "12%, 15%, 15%+" for Revenues, EBITDA and Cash Earnings per Share, respectively.

 

•    Tuck-in Acquisition Strategy to further enhance growth

 

 

Visibility and Predictability

 

•Strong Recurring Revenue Base

•95% of Revenue Retained Each Year

•3 - 5 Year Average Contract Term

•Transaction Services (50%)

•Primarily Non-Discretionary ("per click")

•Credit Services (25%)

•Full-Year plus of Stable Delinquencies

•Lower Funding Costs as Loss Mitigant

•Marketing Services (25%)

•Primarily Non-Discretionary

•$300MM in Deferred Revenue

•Cash Flow $20MM+ Higher than Reported EBITDA

 

• Model Validated During 2001 Recession as Revenues, EBITDA and Cash EPS Grew 14%, 18%, and 30%, respectively.

 

 

Operating Leverage

 

•Drivers Behind Margin Expansion

•Increased Scale

•Modest Capex (£ 5% of Revenues)

•Deferred Revenue Model

 

•EBITDA Margin

•1999 13.8%

•2000 15.5%

•2001 16.1%

 

•Outlook - Targeting 50 bps Expansion Each Year

 

 

Liquidity

 

•Focus on Investment Grade Profile

•Debt / Operating EBITDA of 2.0x - 2.5x

•Debt / Capital of 30% - 40%

 

•Robust Cash Flow ($MM)		2002 (est)
•EBITDA		$140-144
•Cash Flow Adjustment		20
•Operating EBITDA		$160-164
•Less Capex		(40 - 44	)
•Net Cash from Ops		$120
•Less: Interest / Taxes		(50	)
•Free Cash Flow		$70
per Share		$0.90

 

•Estimated Free Cash Flow per Share ($0.90) Exceeds Estimated Reported Cash EPS ($0.60) by 50%.

 

 

Investment Highlights

 

 

•Track Record of Growth

•Compelling Growth Characteristics

•Experienced Management Team

•Strong Financial Performance

•Growth

•Visibility / Predictability

•Operating Leverage

• Liquidity