EVERTEC, Inc. (NYSE:EVTC) (“EVERTEC” or the “Company”) today announced
results for the fourth quarter and year ended December 31, 2013.
Fourth-Quarter 2013 Highlights
-
Total revenue of $93.3 million; Merchant Acquiring segment revenue
increased 9% and Payment Processing segment revenue increased 6%
-
Adjusted Net Income increased 28% to $35.4 million, or $0.43 per
diluted share
-
Repurchased $75 million, or 3.7 million shares of our common stock
Full-Year 2013 Highlights
-
Total revenue increased 5% to $357.2 million
-
Adjusted Net Income increased 44% to $121.3 million, or $1.49 per
diluted share
-
Completed successful first year as a public company and made
significant progress on several growth initiatives
Commenting on the results, Peter Harrington, EVERTEC’s President and
Chief Executive Officer, said: “Our fourth-quarter results cap a
great first year for EVERTEC as a public company. The solid financial
results we achieved in 2013 are a testament to the value of our
diversified business model and reflect the continued execution of our
growth plans. In the year ahead, we will remain focused on our growth
strategies of continuing to penetrate and gain share in our existing
markets; expanding into additional Latin American markets; and seeking
to expand our Merchant Acquiring and Payment Processing businesses. We
continue to see real opportunities in these areas and remain confident
of our ability to grow in a disciplined way.”
Fourth-Quarter 2013 Results
Revenue. Total revenue for the quarter ended December 31, 2013
was $93.3 million, an increase of 3% compared with $91.0 million in the
prior year.
Merchant Acquiring net revenue was $19.8 million, an increase of 9%
compared with $18.1 million in the prior year. Revenue growth in the
quarter was mainly driven by an increase in transaction and sales
volumes.
Payment Processing revenue was $26.2 million, an increase of 6% compared
with $24.8 million in the prior year. Revenue growth in the quarter was
predominantly driven by an increase in ATH network and POS processing
transactions, and accounts on file within our card products business.
Business Solutions revenue was $47.3 million, a decrease of 2% compared
with $48.1 million in the prior year. The year-over-year decrease in
Business Solutions revenue was due primarily to the completion of
certain projects in the quarter ended December 31, 2012 and higher
deferred revenue, partially offset by increased demand for our services
in 2013.
Adjusted EBITDA. For the quarter ended December 31, 2013,
Adjusted EBITDA was $49.1 million, a decrease of 6% compared with $52.1
million in the prior year. The decrease in Adjusted EBITDA was partly
due to higher cost of revenues resulting from higher product sales, and
lower dividend from equity method investment. In addition, the year-over-year
Adjusted EBITDA comparison for the quarter was affected by the inclusion
of a pro-forma adjustment in the prior-year quarter related to estimated
net savings from the elimination of certain employees, temporary
employees, and professional services. These cost-savings adjustments
will not have an impact on Adjusted EBITDA comparisons in future
periods. Adjusted EBITDA margin (Adjusted EBITDA as a percentage of
total revenues) was 52.6% compared with 57.3% in the prior year. The
decrease in Adjusted EBITDA margin was mainly due to the same factors
affecting Adjusted EBITDA.
Adjusted Net Income. For the quarter ended December 31, 2013,
Adjusted Net Income was $35.4 million, an increase of 28% compared with
$27.7 million in the prior year. The increase in Adjusted Net Income was
predominantly due to lower cash interest expense as a result of the debt
refinancing completed in April 2013. Adjusted Net Income per diluted
share increased 19% to $0.43 compared with $0.36 in the prior year.
Full-Year 2013 Results
Revenue. Total revenue for the year ended December 31, 2013 was
$357.2 million, an increase of 5% compared with $341.7 million in the
prior year.
Merchant Acquiring net revenue was $73.6 million, an increase of 6%
compared with $69.6 million in the prior year. Revenue growth was driven
mainly by an increase in transaction and sales volumes, partially offset
by the impact of certain effects during the first half of the year
related to the Durbin Amendment.
Payment Processing revenue was $99.3 million, an increase of 5% compared
with $94.8 million in the prior year. Revenue growth was primarily
driven by an increase in ATH network and POS processing transactions and
accounts on file.
Business Solutions revenue was $184.3 million, an increase of 4%
compared with $177.3 million in the prior year. Revenue growth was
mainly driven by increased demand for our network and core banking
products and services.
Adjusted EBITDA. For the year ended December 31, 2013, Adjusted
EBITDA was $177.7 million, an increase of 5% compared with $169.6
million in the prior year. The increase in Adjusted EBITDA was primarily
due to revenue growth.
Adjusted Net Income. For the year ended December 31, 2013,
Adjusted Net Income was $121.3 million, an increase of 44% compared with
$84.4 million in the prior year. The increase in Adjusted Net Income was
primarily due to the same factors affecting Adjusted EBITDA and to lower
cash interest expense as a result of the debt refinancing we completed
in April 2013. Adjusted Net Income per diluted share increased 35% to
$1.49 compared with $1.10 in the prior year.
Earnings Conference Call and Audio Webcast
The Company will host a conference call to discuss its fourth-quarter
and full-year 2013 financial results today at 5:00 PM EDT.
Hosting the call will be Peter Harrington, President and Chief Executive
Officer, and Juan José Román, Executive Vice President and Chief
Financial Officer. The conference call can be accessed live over the
phone by dialing (888) 554-1417, or for international callers (719)
325-2416. A replay will be available at 8:00 PM EDT and can be accessed
by dialing (877) 870-5176 or (858) 384-5517 for international callers;
the pin number is 7777652. The replay will be available until Wednesday,
February 19, 2014. The call will be webcast live from the Company’s
website at www.evertecinc.com
under the Investor Relations section or directly at http://ir.evertecinc.com.
About EVERTEC
EVERTEC is the leading full-service transaction processing business in
Latin America and the Caribbean. Based in Puerto Rico, EVERTEC provides
a broad range of merchant acquiring, payment processing and business
process management services across 19 countries in the region. EVERTEC
processes over 2.1 billion transactions annually over the electronic
payment networks that it manages. EVERTEC is the largest merchant
acquirer in the Caribbean and Central America, and the seventh largest
in Latin America. EVERTEC owns and operates the ATH network, one of the
leading personal identification number (“PIN”) debit networks in Latin
America. In addition, EVERTEC provides a comprehensive suite of services
for core bank processing, cash processing and technology outsourcing.
EVERTEC serves a broad and diversified customer base of leading
financial institutions, merchants, corporations and government agencies
with 'mission critical' technology solutions. For more information,
visit http://www.evertecinc.com.
About Non-GAAP Financial Measures
This earnings release presents EBITDA, Adjusted EBITDA, Adjusted Net
Income, and Adjusted Net Income per share information. These are
supplemental measures of the Company’s performance that are not required
by, or presented in accordance with, accounting principles generally
accepted in the United States of America (“GAAP”). They are not
measurements of the Company’s financial performance under GAAP and
should not be considered as alternatives to total revenue, net income or
any other performance measures derived in accordance with GAAP or as
alternatives to cash flows from operating activities, as indicators of
cash flows or as measures of the Company’s liquidity. We present EBITDA
and Adjusted EBITDA because we consider them important supplemental
measures of the Company’s performance and believe they are frequently
used by securities analysts, investors and other interested parties to
evaluate companies in the Company’s industry. In addition, the Company’s
presentation of Adjusted EBITDA is consistent with the equivalent
measurements contained in the Credit Agreement in testing EVERTEC
Group’s compliance with covenants therein such as the senior secured
leverage ratio. We use Adjusted Net Income to measure the Company’s
overall profitability because it better reflects the Company’s cash flow
generation by capturing the actual cash taxes paid rather than the
Company’s tax expense as calculated under GAAP, and excludes the impact
of the non-cash amortization and depreciation resulting from the Merger.
For more information regarding EBITDA, Adjusted EBITDA, Adjusted Net
Income, and Adjusted Net Income per share, including a quantitative
reconciliation of EBITDA, Adjusted EBITDA and Adjusted Net Income to the
most directly comparable GAAP financial performance measure, which is
net income, see Schedule 4: Reconciliation of GAAP to Non-GAAP Operating
Results in this earnings release.
Forward-Looking Statements
Certain statements in this press release constitute “forward-looking
statements” within the meaning of, and subject to the protection of, the
Private Securities Litigation Reform Act of 1995. Such forward-looking
statements involve known and unknown risks, uncertainties, and other
factors which may cause the actual results, performance or achievements
of EVERTEC to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
statements. Statements preceded by, followed by, or that otherwise
include the words “believes,” “expects,” “anticipates,” “intends,”
“projects,” “estimates,” and “plans” and similar expressions of future
or conditional verbs such as “will,” “should,” “would,” “may,” and
“could” are generally forward-looking in nature and not historical
facts. Any statements that refer to expectations or other
characterizations of future events, circumstances or results are
forward-looking statements.
Various factors that could cause actual future results and other
future events to differ materially from those estimated by management
include, but are not limited to: the Company’s reliance on its
relationship with Popular for a significant portion of revenues; our
ability to renew our client contracts on terms favorable to us; our
dependence on our processing systems, technology infrastructure,
security systems and fraudulent-payment-detection systems; our ability
to develop, install and adopt new technology; a decreased client base
due to consolidations in the banking and financial-services industry;
the credit risk of our merchant clients, for which we may also be
liable; the continuing market position of the ATH® network; the
Company’s dependence on credit card associations; changes in the
regulatory environment and changes in international, legal, political,
administrative or economic conditions; the geographical concentration of
the Company’s business in Puerto Rico; operating an international
business in multiple regions with potential political and economic
instability; our ability to execute our expansion and acquisition
strategies; our ability to protect our intellectual property rights; our
ability to recruit and retain qualified personnel; our ability to comply
with federal, state, and local regulatory requirements; evolving
industry standards; the Company’s high level of indebtedness and
restrictions contained in the Company’s debt agreements; and the
Company’s ability to generate sufficient cash to service the Company’s
indebtedness and to generate future profits.
Consideration should be given to the areas of risk described above,
as well as those risks set forth under the headings “Forward-Looking
Statements” and “Risk Factors” in the reports the Company files with the
SEC from time to time, in connection with considering any
forward-looking statements that may be made by the Company and its
businesses generally. We undertake no obligation to release publicly any
revisions to any forward-looking statements, to report events or to
report the occurrence of unanticipated events unless we are required to
do so by law.
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EVERTEC, Inc.
Schedule 1: Unaudited Consolidated Statements of Income (Loss)
and Comprehensive Income
(Loss)
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Quarters ended December 31,
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Twelve months ended December 31,
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(Dollar amounts in thousands, except per share data)
|
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2013
|
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2012
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2013
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2012
|
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Revenues
|
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|
|
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|
|
|
|
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Merchant acquiring, net
|
|
|
$
|
19,781
|
|
|
$
|
18,092
|
|
|
|
$
|
73,616
|
|
|
$
|
69,591
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|
Payment processing
|
|
|
|
26,199
|
|
|
|
24,815
|
|
|
|
|
99,327
|
|
|
|
94,801
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|
Business solutions
|
|
|
|
47,332
|
|
|
|
48,078
|
|
|
|
|
184,297
|
|
|
|
177,292
|
|
Total revenues
|
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|
93,312
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|
90,985
|
|
|
|
|
357,240
|
|
|
|
341,684
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|
|
|
|
|
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Operating costs and expenses
|
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|
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Cost of revenues, exclusive of depreciation and amortization shown
below
|
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|
41,128
|
|
|
|
40,391
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|
|
|
|
162,303
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|
|
|
158,860
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Selling, general and administrative expenses
|
|
|
|
8,332
|
|
|
|
6,927
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|
|
|
|
38,810
|
|
|
|
31,686
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|
Depreciation and amortization
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|
|
17,292
|
|
|
|
17,975
|
|
|
|
|
70,366
|
|
|
|
71,492
|
|
Total operating costs and expenses
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|
|
66,752
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|
|
|
65,293
|
|
|
|
|
271,479
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|
|
|
262,038
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Income from operations
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|
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|
26,560
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|
|
|
25,692
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|
|
|
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85,761
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|
|
|
79,646
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|
|
|
|
|
|
|
|
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Non-operating (expenses) income
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Interest income
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|
89
|
|
|
|
83
|
|
|
|
|
236
|
|
|
|
320
|
|
Interest expense
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|
(6,447
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)
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|
|
(15,117
|
)
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|
|
|
(37,861
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)
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|
(54,331
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)
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Earnings of equity method investment
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|
112
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|
|
461
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|
|
|
|
935
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|
|
564
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Other expenses:
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-
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|
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Loss on extinguishment of liability
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|
-
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|
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-
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|
(58,464
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)
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|
-
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Termination of consulting agreement
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|
|
-
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|
|
|
-
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(16,718
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)
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-
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Other income (expenses)
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|
1,338
|
|
|
|
1,311
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|
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|
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(500
|
)
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|
|
(8,491
|
)
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Total other income (expenses)
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1,338
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|
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1,311
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|
|
|
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(75,682
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)
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|
|
(8,491
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)
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Total non-operating (expenses)
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(4,908
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)
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(13,262
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)
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|
(112,372
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)
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|
|
(61,938
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)
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Income (loss) before income taxes
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21,652
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12,430
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(26,611
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)
|
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|
17,708
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Income tax expense (benefit)
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1,613
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|
|
|
(61,159
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)
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|
|
|
(1,990
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)
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|
(59,658
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)
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Net income (loss)
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20,039
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73,589
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(24,621
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)
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|
77,366
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Other comprehensive (loss) income, net of tax
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|
|
|
|
|
|
|
|
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Foreign currency translation adjustments
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|
|
|
(482
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)
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|
(2,075
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)
|
|
|
|
1,268
|
|
|
|
476
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|
Total comprehensive income (loss)
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|
$
|
19,557
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|
|
$
|
71,514
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|
|
$
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(23,353
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)
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$
|
77,842
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Net income (loss) per common share: (1)
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Basic
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$
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0.25
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$
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1.01
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$
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(0.31
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)
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$
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1.06
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Diluted
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$
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0.24
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$
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0.96
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$
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(0.31
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)
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$
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1.01
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Shares used in computing net income (loss) per common share: (1)
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Basic
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81,030,127
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72,726,110
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78,914,310
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72,687,622
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Diluted
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81,943,035
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76,347,672
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78,914,310
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|
76,636,417
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_______________________________
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(1) Share count was adjusted for the 2:1 stock split
that occurred on April 1, 2013.
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EVERTEC, Inc.
Schedule 2: Unaudited Consolidated Balance Sheets
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(Dollar amounts in thousands, except per share data)
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|
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December 31, 2013
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|
December 31, 2012
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Assets
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Current Assets:
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Cash
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$
|
22,485
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$
|
25,634
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Restricted cash
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5,433
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|
|
4,939
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Accounts receivable, net
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|
68,434
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|
|
|
78,621
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|
Deferred tax asset
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|
|
2,537
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|
1,434
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Prepaid expenses and other assets
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|
17,524
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19,345
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Total current assets
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116,413
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|
129,973
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Investment in equity investee
|
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10,639
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|
11,080
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Property and equipment, net
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33,240
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|
|
|
36,737
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Goodwill
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|
373,119
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|
372,307
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Other intangible assets, net
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367,780
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|
403,170
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Other long-term assets
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|
18,162
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|
|
|
24,478
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Total assets
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|
$
|
919,353
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|
|
$
|
977,745
|
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Liabilities and stockholders' equity
|
|
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|
Current Liabilities:
|
|
|
|
|
|
|
Accrued liabilities
|
|
|
$
|
26,571
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|
|
$
|
34,609
|
|
Accounts payable
|
|
|
|
18,630
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|
|
|
24,482
|
|
Unearned income
|
|
|
|
5,595
|
|
|
|
1,166
|
|
Income tax payable
|
|
|
|
259
|
|
|
|
2,959
|
|
Current portion of long-term debt
|
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|
19,000
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|
|
|
6,052
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|
Short-term borrowings
|
|
|
|
51,200
|
|
|
|
26,995
|
|
Deferred tax liability, net
|
|
|
|
543
|
|
|
|
632
|
|
Total current liabilities
|
|
|
|
121,798
|
|
|
|
96,895
|
|
Long-term debt
|
|
|
|
665,680
|
|
|
|
730,709
|
|
Long-term deferred tax liability, net
|
|
|
|
20,212
|
|
|
|
24,614
|
|
Other long-term liabilities
|
|
|
|
333
|
|
|
|
3,072
|
|
Total liabilities
|
|
|
|
808,023
|
|
|
|
855,290
|
|
Stockholders' equity
|
|
|
|
|
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|
Preferred stock, par value $0.01; 2,000,000 shares authorized; none
issued
|
|
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|
-
|
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|
-
|
|
Common stock, par value $0.01; 206,000,000 shares authorized;
78,286,465 and 72,846,144 shares issued and outstanding at
December 31, 2013 and December 31, 2012, respectively
|
|
|
|
783
|
|
|
|
728
|
|
Additional paid-in capital
|
|
|
|
80,718
|
|
|
|
52,155
|
|
Accumulated earnings
|
|
|
|
29,403
|
|
|
|
70,414
|
|
Accumulated other comprehensive income (loss), net of tax
|
|
|
|
426
|
|
|
|
(842
|
)
|
Total stockholders' equity
|
|
|
|
111,330
|
|
|
|
122,455
|
|
Total liabilities and stockholders' equity
|
|
|
$
|
919,353
|
|
|
$
|
977,745
|
|
|
|
|
|
|
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|
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|
|
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EVERTEC, Inc.
Schedule 3: Unaudited Consolidated Statements of Cash Flows
|
|
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|
|
|
|
|
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|
|
Years ended December 31,
|
|
|
|
|
2013
|
|
|
|
|
2012
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
Net (loss) income
|
|
|
$
|
(24,621
|
)
|
|
|
$
|
77,366
|
|
Adjustments to reconcile net (loss) income to net cash provided by
operating activities:
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
70,366
|
|
|
|
|
71,492
|
|
Amortization of debt issue costs and premium and accretion of
discount
|
|
|
|
3,905
|
|
|
|
|
5,091
|
|
Write-off of debt issue costs, premium and discount accounted as
loss on extinguishment of debt
|
|
|
|
16,555
|
|
|
|
|
-
|
|
Provision for doubtful accounts and sundry losses
|
|
|
|
672
|
|
|
|
|
1,645
|
|
Deferred tax benefit
|
|
|
|
(5,702
|
)
|
|
|
|
(66,568
|
)
|
Share-based compensation
|
|
|
|
6,179
|
|
|
|
|
1,204
|
|
Unrealized loss (gain) of indemnification assets
|
|
|
|
383
|
|
|
|
|
(966
|
)
|
Amortization of a contract liability
|
|
|
|
-
|
|
|
|
|
(703
|
)
|
Loss on disposition of property and equipment and other intangibles
|
|
|
|
538
|
|
|
|
|
1,671
|
|
Earnings of equity method investment
|
|
|
|
(935
|
)
|
|
|
|
(564
|
)
|
Dividend received from equity method investment
|
|
|
|
984
|
|
|
|
|
1,630
|
|
Premium on issuance of long-term debt
|
|
|
|
-
|
|
|
|
|
2,000
|
|
Decrease (increase) in assets:
|
|
|
|
|
|
|
Accounts receivable, net
|
|
|
|
9,243
|
|
|
|
|
(15,966
|
)
|
Prepaid expenses and other assets
|
|
|
|
1,685
|
|
|
|
|
2,257
|
|
Other long-term assets
|
|
|
|
(1,381
|
)
|
|
|
|
(3,567
|
)
|
(Decrease) increase in liabilities:
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
|
|
(16,734
|
)
|
|
|
|
6,800
|
|
Income tax payable
|
|
|
|
(2,700
|
)
|
|
|
|
(424
|
)
|
Unearned income
|
|
|
|
4,429
|
|
|
|
|
266
|
|
Total adjustments
|
|
|
|
87,487
|
|
|
|
|
5,298
|
|
Net cash provided by operating activities
|
|
|
|
62,866
|
|
|
|
|
82,664
|
|
|
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
Net (increase) decrease in restricted cash
|
|
|
|
(494
|
)
|
|
|
|
349
|
|
Intangible assets acquired
|
|
|
|
(16,980
|
)
|
|
|
|
(10,896
|
)
|
Property and equipment acquired
|
|
|
|
(11,486
|
)
|
|
|
|
(16,613
|
)
|
Proceeds from sales of property and equipment
|
|
|
|
16
|
|
|
|
|
118
|
|
Net cash used in investing activities
|
|
|
|
(28,944
|
)
|
|
|
|
(27,042
|
)
|
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
Proceeds from initial public offering, net of offering costs of
$12,567
|
|
|
|
112,431
|
|
|
|
|
-
|
|
Proceeds from issuance of long-term debt
|
|
|
|
700,000
|
|
|
|
|
208,725
|
|
Debt issuance costs
|
|
|
|
(12,077
|
)
|
|
|
|
(2,174
|
)
|
Net increase in short-term borrowings
|
|
|
|
22,405
|
|
|
|
|
26,995
|
|
Proceeds from new short-term borrowing for purchase of equipment
|
|
|
|
1,800
|
|
|
|
|
-
|
|
Dividends paid
|
|
|
|
(16,390
|
)
|
|
|
|
(319,959
|
)
|
Statutory minimum withholding taxes paid on cashless exercises of
stock options
|
|
|
|
(16,851
|
)
|
|
|
|
-
|
|
Tax windfall benefits on exercises of stock options and vesting of
restricted stocks
|
|
|
|
1,829
|
|
|
|
|
-
|
|
Issuance of common stock
|
|
|
|
29
|
|
|
|
|
450
|
|
Repurchase of common stock
|
|
|
|
(75,000
|
)
|
|
|
|
-
|
|
Repayment and repurchase of long-term debt
|
|
|
|
(755,023
|
)
|
|
|
|
-
|
|
Repayment of other financing agreement
|
|
|
|
(224
|
)
|
|
|
|
(225
|
)
|
Net cash used in financing activities
|
|
|
|
(37,071
|
)
|
|
|
|
(86,188
|
)
|
|
|
|
|
|
|
|
Net decrease in cash
|
|
|
|
(3,149
|
)
|
|
|
|
(30,566
|
)
|
Cash at beginning of the period
|
|
|
|
25,634
|
|
|
|
|
56,200
|
|
Cash at end of the period
|
|
|
$
|
22,485
|
|
|
|
$
|
25,634
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EVERTEC, Inc.
Schedule 4: Reconciliation of GAAP to Non-GAAP Operating Results
|
|
|
|
|
|
|
|
|
|
|
Quarters ended December 31,
|
|
|
Twelve months ended December 31,
|
(Dollar amounts in thousands, except per share data)
|
|
|
|
2013
|
|
|
|
|
2012
|
|
|
|
|
2013
|
|
|
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
$
|
20,039
|
|
|
|
$
|
73,589
|
|
|
|
$
|
(24,621
|
)
|
|
|
$
|
77,366
|
|
Income tax expense (benefit)
|
|
|
|
1,613
|
|
|
|
|
(61,159
|
)
|
|
|
|
(1,990
|
)
|
|
|
|
(59,658
|
)
|
Interest expense, net
|
|
|
|
6,358
|
|
|
|
|
15,034
|
|
|
|
|
37,625
|
|
|
|
|
54,011
|
|
Depreciation and amortization
|
|
|
|
17,292
|
|
|
|
|
17,975
|
|
|
|
|
70,366
|
|
|
|
|
71,492
|
|
EBITDA
|
|
|
|
45,302
|
|
|
|
|
45,439
|
|
|
|
|
81,380
|
|
|
|
|
143,211
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Software maintenance reimbursement and other costs(1)
|
|
|
|
619
|
|
|
|
|
507
|
|
|
|
|
2,298
|
|
|
|
|
2,429
|
|
Equity income (2)
|
|
|
|
371
|
|
|
|
|
432
|
|
|
|
|
49
|
|
|
|
|
1,057
|
|
Compensation and benefits (3)
|
|
|
|
596
|
|
|
|
|
315
|
|
|
|
|
7,469
|
|
|
|
|
3,795
|
|
Pro forma cost reduction adjustments(4)
|
|
|
|
-
|
|
|
|
|
2,150
|
|
|
|
|
175
|
|
|
|
|
2,150
|
|
Transaction, refinancing and other non-recurring fees (5)
|
|
|
|
1,855
|
|
|
|
|
3,175
|
|
|
|
|
65,885
|
|
|
|
|
15,246
|
|
Management fees (6)
|
|
|
|
-
|
|
|
|
|
745
|
|
|
|
|
20,109
|
|
|
|
|
2,982
|
|
Purchase accounting (7)
|
|
|
|
371
|
|
|
|
|
(632
|
)
|
|
|
|
350
|
|
|
|
|
(1,284
|
)
|
Adjusted EBITDA
|
|
|
|
49,114
|
|
|
|
|
52,131
|
|
|
|
|
177,715
|
|
|
|
|
169,586
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro forma cost reduction adjustments (8)
|
|
|
|
-
|
|
|
|
|
(2,150
|
)
|
|
|
|
(175
|
)
|
|
|
|
(2,150
|
)
|
Operating depreciation and amortization (9)
|
|
|
|
(7,855
|
)
|
|
|
|
(7,901
|
)
|
|
|
|
(31,645
|
)
|
|
|
|
(31,287
|
)
|
Cash interest expense, net (10)
|
|
|
|
(5,590
|
)
|
|
|
|
(13,692
|
)
|
|
|
|
(22,282
|
)
|
|
|
|
(48,921
|
)
|
Cash income taxes (11)
|
|
|
|
(299
|
)
|
|
|
|
(656
|
)
|
|
|
|
(2,338
|
)
|
|
|
|
(2,785
|
)
|
Adjusted Net Income
|
|
|
$
|
35,370
|
|
|
|
$
|
27,732
|
|
|
|
$
|
121,275
|
|
|
|
$
|
84,443
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income per common share: (12)
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
$
|
0.44
|
|
|
|
$
|
0.38
|
|
|
|
$
|
1.54
|
|
|
|
$
|
1.16
|
|
Diluted
|
|
|
$
|
0.43
|
|
|
|
$
|
0.36
|
|
|
|
$
|
1.49
|
|
|
|
$
|
1.10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in computing adjusted net income per common share:
(12)
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
81,030,127
|
|
|
|
|
72,726,110
|
|
|
|
|
78,914,310
|
|
|
|
|
72,687,622
|
|
Diluted
|
|
|
|
81,943,035
|
|
|
|
|
76,347,672
|
|
|
|
|
81,239,519
|
|
|
|
|
76,636,417
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
_______________________________
|
|
|
|
1)
|
|
Predominantly represents reimbursements received for certain
software maintenance expenses as part of the Merger.
|
2)
|
|
Represents the elimination of non-cash equity earnings from our
19.99% equity investment in CONTADO, net of cash dividends
received.
|
3)
|
|
Predominantly represents non-cash equity based compensation
expense.
|
4)
|
|
Represents the pro forma effect of the expected net savings mainly
in compensation and benefits from the reduction of certain
employees, temporary employees and professional services. This pro
forma amount was calculated using the net amount of actual
expenses for temporary employees and professional services for the
twelve-month period prior to their replacement, separation and/or
elimination net of the incremental cost of the new full-time
employees that were hired.
|
5)
|
|
Represents fees and expenses associated with non-recurring
corporate transactions, including costs associated with the
refinancing and debt extinguishment of $58.6 million in the second
quarter of 2013.
|
6)
|
|
Represents consulting fees paid to Apollo and Popular. In
connection with our initial public offering during the second
quarter of 2013, our consulting agreements with Apollo and Popular
were terminated.
|
7)
|
|
Represents the elimination of the effects of purchase accounting
in connection with certain customer service and software-related
arrangements whereby EVERTEC receives reimbursements from Popular.
|
8)
|
|
Represents the elimination of the pro forma benefits described in
note 4 above.
|
9)
|
|
Represents operating depreciation and amortization expense, which
excludes amounts generated as a result of the Merger.
|
10)
|
|
For the twelve months ended December 31, 2013 represents pro forma
cash interest expense assuming EVERTEC’s April 2013 refinancing
occurred on January 1, 2013. For 2012 periods, as well as for the
three months ended December 31, 2013, represents interest expense,
less interest income, as they appear on our consolidated
statements of income (loss) and comprehensive income (loss),
adjusted to exclude non-cash amortization of the debt issue costs,
premium and accretion of discount.
|
11)
|
|
Represents cash taxes paid for each period presented.
|
12)
|
|
Share count was adjusted for the 2:1 stock split that occurred on
April 1, 2013.
|
|
|
|
|
|
|
|
|
|
|
Schedule 5: Unaudited Income from Operations by Segment
|
|
|
|
|
|
|
|
|
|
|
Quarters ended December 31,
|
|
|
Twelve months ended December 31,
|
(Dollar amounts in thousands)
|
|
|
|
2013
|
|
|
|
|
2012
|
|
|
|
|
2013
|
|
|
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment income from operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Merchant acquiring, net
|
|
|
$
|
9,413
|
|
|
|
$
|
9,100
|
|
|
|
$
|
35,376
|
|
|
|
$
|
33,836
|
|
Payment processing
|
|
|
|
15,893
|
|
|
|
|
15,030
|
|
|
|
|
54,429
|
|
|
|
|
53,682
|
|
Business solutions
|
|
|
|
11,830
|
|
|
|
|
14,094
|
|
|
|
|
42,430
|
|
|
|
|
39,845
|
|
Total segment income from operations
|
|
|
|
37,136
|
|
|
|
|
38,224
|
|
|
|
|
132,235
|
|
|
|
|
127,363
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Merger related depreciation and amortization and other unallocated
expenses (1)
|
|
|
|
(10,576
|
)
|
|
|
|
(12,532
|
)
|
|
|
|
(46,474
|
)
|
|
|
|
(47,717
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations
|
|
|
$
|
26,560
|
|
|
|
$
|
25,692
|
|
|
|
$
|
85,761
|
|
|
|
$
|
79,646
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
___________________________
|
|
|
|
1)
|
|
Predominantly represents non-operating depreciation and
amortization expenses generated as a result of the Merger and
certain non-recurring fees and expenses.
|
Copyright Business Wire 2014