EVERTEC, Inc. (NYSE:EVTC) (“EVERTEC” or the “Company”) today announced
results for the second quarter ended June 30, 2014.
Second-Quarter 2014 Highlights
-
Total revenue increased to $91.1 million; Merchant Acquiring and
Payment Processing segments revenue each increased 9%.
-
Adjusted EBITDA increased 5% to $45.5 million.
-
Adjusted Net Income increased 11% to $32.2 million and Adjusted Net
Income per diluted share increased 17% to $0.41.
Peter Harrington, EVERTEC’s President and Chief Executive Officer,
commented on the results: “We delivered solid second quarter results
highlighted by the combination of 9% growth in our payments businesses,
50% adjusted EBITDA margin, and 17% EPS growth. Looking forward, we will
continue to capitalize on the strong secular growth in the Latin
American payments markets by executing our strategy and winning market
share.”
Second-Quarter 2014 Results
Revenue. Total revenue for the quarter ended June 30, 2014 was
$91.1 million, an increase of 2% compared with $89.2 million in the
prior year.
Merchant Acquiring net revenue was $19.8 million, an increase of 9%
compared with $18.2 million in the prior year. Revenue growth in the
quarter was driven mainly by an increase in transaction volumes.
Payment Processing revenue was $26.4 million, an increase of 9% compared
with $24.3 million in the prior year. Revenue growth in the quarter was
driven mainly by new customer additions and an increase in accounts on
file within the card products business, an increase in ATH and POS
network and processing transactions, and fees generated from an annual
Department of Education program the Company processes in Puerto Rico.
Business Solutions revenue was $44.9 million, a decrease of 4% compared
with $46.7 million in the prior year. The decrease in revenue was due
almost entirely to a $2.9 million year-over-year decline in hardware and
software sales in the quarter, partially offset by increased revenue
from other products and services including network solutions and IT
consulting.
Adjusted EBITDA. For the quarter ended June 30, 2014, Adjusted
EBITDA was $45.5 million, an increase of 5% compared with $43.4 million
in the prior year. The increase in Adjusted EBITDA was due mostly to
revenue growth and operating leverage in our Merchant Acquiring and
Payment Processing businesses. Adjusted EBITDA margin was 50.0%, an
increase of 130 basis points compared with 48.7% in the prior year.
Adjusted Net Income. For the quarter ended June 30, 2014,
Adjusted Net Income was $32.2 million, an increase of 11% compared with
$28.9 million in the prior year. The increase in Adjusted Net Income was
driven mainly by Adjusted EBITDA growth, lower levels of operating
depreciation and amortization expense, and lower cash taxes. Adjusted
Net Income per diluted share increased 17% to $0.41 compared with $0.35
in the prior year.
Earnings Conference Call and Audio Webcast
The Company has scheduled a conference call to discuss its second-quarter
2014 financial results today at 5:00 PM ET. 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 (877)
718-5101 or (719) 325-4778 for international callers. A replay will be
available at 8:00 PM ET and can be accessed by dialing (877) 870-5176 or
(858) 384-5517 for international callers; the pin number is 6668719. The
replay will be available until Wednesday, August 13, 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, Inc. (NYSE: EVTC) is the leading full-service transaction
processing business in Latin America, providing a broad range of
merchant acquiring, payment processing and business solutions services.
The largest merchant acquirer in the Caribbean and Central America—and
one of the largest in Latin America—EVERTEC serves 19 countries in the
region from its base in Puerto Rico. The Company manages a system of
electronic payment networks that process more than 2.1 billion
transactions annually, and offers a comprehensive suite of services for
core bank processing, cash processing and technology outsourcing. In
addition, EVERTEC owns and operates the ATH network, one of the leading
personal identification number (“PIN”) debit networks in Latin America.
The Company serves a 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
supplemental measures of the Company’s performance 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 our 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 our 2010
merger involving an affiliate of Apollo Global management, LLC (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 that 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 revenue; our
ability to renew our client contracts on terms favorable to us; the
effectiveness of our risk management procedures; our dependence on our
processing systems, technology infrastructure, security systems and
fraudulent-payment-detection systems, and the risk that our systems may
experience breakdowns or fail to prevent security breaches or fraudulent
transfers; 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;
regulatory limitations on our activities due to our relationship with
Popular and our role as a service provider to financial institutions;
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; operating in countries and
counterparties that put us at risk of violating U.S. sanctions laws; 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.
EVERTEC, Inc.
|
Schedule 1: Unaudited Consolidated Statements of Income and
Comprehensive Income
|
|
|
|
|
|
|
|
|
Quarters ended June 30,
|
|
|
Six months ended June 30,
|
(Dollar amounts in thousands, except per share data)
|
|
2014
|
|
2013
|
|
|
2014
|
|
2013
|
Revenues
|
|
|
|
|
|
|
|
|
|
Merchant acquiring, net
|
|
$
|
19,827
|
|
|
$
|
18,165
|
|
|
|
$
|
39,118
|
|
|
$
|
35,624
|
|
Payment processing
|
|
|
26,406
|
|
|
|
24,285
|
|
|
|
|
51,408
|
|
|
|
48,397
|
|
Business solutions
|
|
|
44,888
|
|
|
|
46,725
|
|
|
|
|
87,805
|
|
|
|
92,493
|
|
Total revenues
|
|
|
91,121
|
|
|
|
89,175
|
|
|
|
|
178,331
|
|
|
|
176,514
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues, exclusive of depreciation and amortization shown
below
|
|
|
38,839
|
|
|
|
41,771
|
|
|
|
|
76,484
|
|
|
|
82,273
|
|
Selling, general and administrative expenses
|
|
|
10,463
|
|
|
|
12,624
|
|
|
|
|
18,525
|
|
|
|
21,487
|
|
Depreciation and amortization
|
|
|
16,390
|
|
|
|
17,842
|
|
|
|
|
33,004
|
|
|
|
35,417
|
|
Total operating costs and expenses
|
|
|
65,692
|
|
|
|
72,237
|
|
|
|
|
128,013
|
|
|
|
139,177
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations
|
|
|
25,429
|
|
|
|
16,938
|
|
|
|
|
50,318
|
|
|
|
37,337
|
|
|
|
|
|
|
|
|
|
|
|
Non-operating (expenses) income
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
79
|
|
|
|
49
|
|
|
|
|
154
|
|
|
|
93
|
|
Interest expense
|
|
|
(6,501
|
)
|
|
|
(9,747
|
)
|
|
|
|
(13,410
|
)
|
|
|
(25,011
|
)
|
Earnings of equity method investment
|
|
|
343
|
|
|
|
348
|
|
|
|
|
664
|
|
|
|
625
|
|
Other income (expenses):
|
|
|
|
|
|
|
|
|
|
Loss on extinguishment of debt
|
|
|
-
|
|
|
|
(58,464
|
)
|
|
|
|
-
|
|
|
|
(58,464
|
)
|
Termination of consulting agreement
|
|
|
-
|
|
|
|
(16,718
|
)
|
|
|
|
-
|
|
|
|
(16,718
|
)
|
Other income (expenses)
|
|
|
385
|
|
|
|
(2,353
|
)
|
|
|
|
2,376
|
|
|
|
(2,286
|
)
|
Total other income (expenses)
|
|
|
385
|
|
|
|
(77,535
|
)
|
|
|
|
2,376
|
|
|
|
(77,468
|
)
|
Total non-operating expenses
|
|
|
(5,694
|
)
|
|
|
(86,885
|
)
|
|
|
|
(10,216
|
)
|
|
|
(101,761
|
)
|
Income (loss) before income taxes
|
|
|
19,735
|
|
|
|
(69,947
|
)
|
|
|
|
40,102
|
|
|
|
(64,424
|
)
|
Income tax expense (benefit)
|
|
|
1,962
|
|
|
|
(5,012
|
)
|
|
|
|
4,123
|
|
|
|
(4,961
|
)
|
Net income (loss)
|
|
|
17,773
|
|
|
|
(64,935
|
)
|
|
|
|
35,979
|
|
|
|
(59,463
|
)
|
Other comprehensive income (loss), net of tax
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments
|
|
|
794
|
|
|
|
(394
|
)
|
|
|
|
(6,951
|
)
|
|
|
1,960
|
|
Total comprehensive income (loss)
|
|
$
|
18,567
|
|
|
$
|
(65,329
|
)
|
|
|
$
|
29,028
|
|
|
$
|
(57,503
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per common share: (1)
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.23
|
|
|
$
|
(0.82
|
)
|
|
|
$
|
0.46
|
|
|
$
|
(0.78
|
)
|
Diluted
|
|
$
|
0.22
|
|
|
$
|
(0.82
|
)
|
|
|
$
|
0.45
|
|
|
$
|
(0.78
|
)
|
|
|
|
|
|
|
|
|
|
|
Shares used in computing net income (loss) per common share: (1)
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
78,410,554
|
|
|
|
78,928,780
|
|
|
|
|
78,393,042
|
|
|
|
75,849,551
|
|
Diluted
|
|
|
79,199,964
|
|
|
|
78,928,780
|
|
|
|
|
79,204,642
|
|
|
|
75,849,551
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Share count was adjusted for the 2:1 stock split that
occurred on April 1, 2013.
EVERTEC, Inc.
|
Schedule 2: Unaudited Consolidated Balance Sheets
|
|
|
|
|
|
(Dollar amounts in thousands, except per share data)
|
|
June 30, 2014
|
|
December 31, 2013
|
Assets
|
|
|
|
|
Current Assets:
|
|
|
|
|
Cash
|
|
$
|
27,831
|
|
|
$
|
22,485
|
Restricted cash
|
|
|
5,195
|
|
|
|
5,433
|
Accounts receivable, net
|
|
|
71,479
|
|
|
|
68,434
|
Deferred tax asset
|
|
|
2,812
|
|
|
|
2,537
|
Prepaid expenses and other assets
|
|
|
21,846
|
|
|
|
17,524
|
Total current assets
|
|
|
129,163
|
|
|
|
116,413
|
Investment in equity investee
|
|
|
11,287
|
|
|
|
10,639
|
Property and equipment, net
|
|
|
29,371
|
|
|
|
33,240
|
Goodwill
|
|
|
369,203
|
|
|
|
373,119
|
Other intangible assets, net
|
|
|
347,114
|
|
|
|
367,780
|
Other long-term assets
|
|
|
13,745
|
|
|
|
18,162
|
Total assets
|
|
|
899,883
|
|
|
|
919,353
|
Liabilities and stockholders' equity
|
|
|
|
|
Current Liabilities:
|
|
|
|
|
Accrued liabilities
|
|
|
29,159
|
|
|
|
26,571
|
Accounts payable
|
|
|
14,256
|
|
|
|
18,630
|
Unearned income
|
|
|
8,498
|
|
|
|
5,595
|
Income tax payable
|
|
|
1,801
|
|
|
|
259
|
Current portion of long-term debt
|
|
|
19,000
|
|
|
|
19,000
|
Short-term borrowings
|
|
|
23,000
|
|
|
|
51,200
|
Deferred tax liability, net
|
|
|
461
|
|
|
|
543
|
Total current liabilities
|
|
|
96,175
|
|
|
|
121,798
|
Long-term debt
|
|
|
656,626
|
|
|
|
665,680
|
Long-term deferred tax liability, net
|
|
|
20,702
|
|
|
|
20,212
|
Other long-term liabilities
|
|
|
251
|
|
|
|
333
|
Total liabilities
|
|
|
773,754
|
|
|
|
808,023
|
Commitments and contingencies
|
|
|
|
|
Stockholders' equity
|
|
|
|
|
Preferred stock, par value $0.01; 2,000,000 shares authorized; none
issued
|
|
|
-
|
|
|
|
-
|
Common stock, par value $0.01; 206,000,000 shares authorized;
78,631,847
|
|
|
|
|
shares issued and outstanding at June 30, 2014 (December 31, 2013-
78,286,465)
|
|
|
786
|
|
|
|
783
|
Additional paid-in capital
|
|
|
82,167
|
|
|
|
80,718
|
Accumulated earnings
|
|
|
49,701
|
|
|
|
29,403
|
Accumulated other comprehensive (loss) income, net of tax
|
|
|
(6,525
|
)
|
|
|
426
|
Total stockholders' equity
|
|
|
126,129
|
|
|
|
111,330
|
Total liabilities and stockholders' equity
|
|
|
899,883
|
|
|
|
919,353
|
|
|
|
|
|
EVERTEC, Inc.
|
Schedule 3: Unaudited Consolidated Statements of Cash Flows
|
|
|
|
|
|
|
|
Six months ended June 30,
|
|
|
2014
|
|
2013
|
|
|
|
|
|
Cash flows from operating activities
|
|
|
|
|
Net income (loss)
|
|
$
|
35,979
|
|
|
$
|
(59,463
|
)
|
Adjustments to reconcile net income to net cash provided by (used
in) operating activities:
|
|
|
|
|
Depreciation and amortization
|
|
|
33,004
|
|
|
|
35,417
|
|
Amortization of debt issue costs and premium and accretion of
discount
|
|
|
1,538
|
|
|
|
2,369
|
|
Write-off of debt issue costs, premium and discount accounted as
loss on extinguishment
|
|
|
-
|
|
|
|
16,555
|
|
Provision for doubtful accounts and sundry losses
|
|
|
1,058
|
|
|
|
826
|
|
Deferred tax benefit
|
|
|
(430
|
)
|
|
|
(6,251
|
)
|
Share-based compensation
|
|
|
665
|
|
|
|
5,483
|
|
Unrealized loss (gain) of indemnification assets
|
|
|
173
|
|
|
|
(19
|
)
|
Loss on disposition of property and equipment and other intangibles
|
|
|
64
|
|
|
|
32
|
|
Earnings of equity method investment
|
|
|
(664
|
)
|
|
|
(625
|
)
|
Dividend received from equity method investment
|
|
|
326
|
|
|
|
500
|
|
(Increase) decrease in assets:
|
|
|
|
|
Accounts receivable, net
|
|
|
(2,045
|
)
|
|
|
492
|
|
Prepaid expenses and other assets
|
|
|
(4,267
|
)
|
|
|
(5,417
|
)
|
Other long-term assets
|
|
|
1,811
|
|
|
|
(323
|
)
|
(Decrease) increase in liabilities:
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
|
(4,120
|
)
|
|
|
(3,347
|
)
|
Income tax payable
|
|
|
1,542
|
|
|
|
(1,867
|
)
|
Unearned income
|
|
|
2,903
|
|
|
|
1,736
|
|
Total adjustments
|
|
|
31,558
|
|
|
|
45,561
|
|
Net cash provided by (used in) operating activities
|
|
|
67,537
|
|
|
|
(13,902
|
)
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
Net decrease (increase) in restricted cash
|
|
|
238
|
|
|
|
(44
|
)
|
Intangible assets acquired
|
|
|
(5,841
|
)
|
|
|
(7,927
|
)
|
Property and equipment acquired
|
|
|
(3,895
|
)
|
|
|
(4,384
|
)
|
Proceeds from sales of property and equipment
|
|
|
3
|
|
|
|
11
|
|
Net cash used in investing activities
|
|
|
(9,495
|
)
|
|
|
(12,344
|
)
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
Proceeds from initial public offering, net of offering costs of
$12,567
|
|
|
-
|
|
|
|
112,432
|
|
Proceeds from issuance of long-term debt
|
|
|
-
|
|
|
|
700,000
|
|
Statutory minimum withholding taxes paid on cashless exercises of
stock options
|
|
|
(770
|
)
|
|
|
(16,688
|
)
|
Debt issuance costs
|
|
|
-
|
|
|
|
(12,077
|
)
|
Net decrease in short-term borrowing
|
|
|
(27,000
|
)
|
|
|
(14,000
|
)
|
Repayment of short-term borrowing for purchase of equipment
|
|
|
(1,200
|
)
|
|
|
(4,332
|
)
|
Dividends paid
|
|
|
(15,680
|
)
|
|
|
-
|
|
Tax windfall benefits on exercises of stock options
|
|
|
1,482
|
|
|
|
470
|
|
Issuance of common stock, net
|
|
|
54
|
|
|
|
28
|
|
Repayment of other financing agreement
|
|
|
(82
|
)
|
|
|
(112
|
)
|
Repayment of long-term debt
|
|
|
(9,500
|
)
|
|
|
(745,522
|
)
|
Net cash (used in) provided by financing activities
|
|
|
(52,696
|
)
|
|
|
20,199
|
|
Net increase (decrease) in cash
|
|
|
5,346
|
|
|
|
(6,047
|
)
|
Cash at beginning of the period
|
|
|
22,485
|
|
|
|
25,634
|
|
Cash at end of the period
|
|
$
|
27,831
|
|
|
$
|
19,587
|
|
|
|
|
|
|
|
|
|
|
EVERTEC, Inc.
|
Schedule 4: Reconciliation of GAAP to Non-GAAP Operating Results
|
|
|
|
|
|
|
|
Quarters ended June 30,
|
|
Six months ended June 30,
|
(Dollar amounts in thousands)
|
|
2014
|
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
17,773
|
|
|
|
$
|
(64,935
|
)
|
|
$
|
35,979
|
|
|
$
|
(59,463
|
)
|
Income tax expense (benefit)
|
|
|
1,962
|
|
|
|
|
(5,012
|
)
|
|
|
4,123
|
|
|
|
(4,961
|
)
|
Interest expense, net
|
|
|
6,422
|
|
|
|
|
9,698
|
|
|
|
13,256
|
|
|
|
24,918
|
|
Depreciation and amortization
|
|
|
16,390
|
|
|
|
|
17,842
|
|
|
|
33,004
|
|
|
|
35,417
|
|
EBITDA
|
|
|
42,547
|
|
|
|
|
(42,407
|
)
|
|
|
86,362
|
|
|
|
(4,089
|
)
|
|
|
|
|
|
|
|
|
|
|
Software maintenance reimbursement and other costs(1)
|
|
|
563
|
|
|
|
|
489
|
|
|
|
1,109
|
|
|
|
1,091
|
|
Equity income (2)
|
|
|
(17
|
)
|
|
|
|
153
|
|
|
|
(338
|
)
|
|
|
(124
|
)
|
Compensation and benefits (3)
|
|
|
437
|
|
|
|
|
6,218
|
|
|
|
925
|
|
|
|
6,549
|
|
Pro forma cost reduction adjustments(4)
|
|
|
-
|
|
|
|
|
75
|
|
|
|
-
|
|
|
|
150
|
|
Transaction and other non-recurring fees (5)
|
|
|
1,999
|
|
|
|
|
59,645
|
|
|
|
2,516
|
|
|
|
61,515
|
|
Management fees (6)
|
|
|
-
|
|
|
|
|
19,261
|
|
|
|
-
|
|
|
|
20,109
|
|
Purchase accounting (7)
|
|
|
(6
|
)
|
|
|
|
(3
|
)
|
|
|
173
|
|
|
|
(19
|
)
|
Adjusted EBITDA
|
|
|
45,523
|
|
|
|
|
43,431
|
|
|
|
90,747
|
|
|
|
85,182
|
|
|
|
|
|
|
|
|
|
|
|
Pro forma EBITDA adjustments (8)
|
|
|
-
|
|
|
|
|
(75
|
)
|
|
|
-
|
|
|
|
(150
|
)
|
Operating depreciation and amortization (9)
|
|
|
(7,281
|
)
|
|
|
|
(8,079
|
)
|
|
|
(14,764
|
)
|
|
|
(15,894
|
)
|
Cash interest expense, net (10)
|
|
|
(5,655
|
)
|
|
|
|
(5,434
|
)
|
|
|
(11,410
|
)
|
|
|
(11,110
|
)
|
Cash income taxes (11)
|
|
|
(402
|
)
|
|
|
|
(969
|
)
|
|
|
(402
|
)
|
|
|
(1,666
|
)
|
Adjusted Net Income
|
|
$
|
32,185
|
|
|
|
$
|
28,874
|
|
|
$
|
64,171
|
|
|
$
|
56,362
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net income per common share: (12)
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.41
|
|
|
|
$
|
0.37
|
|
|
$
|
0.82
|
|
|
$
|
0.74
|
|
Diluted
|
|
$
|
0.41
|
|
|
|
$
|
0.35
|
|
|
$
|
0.81
|
|
|
$
|
0.70
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in computing Adjusted Net Income per common share:
(12)
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
78,410,554
|
|
|
|
|
78,928,780
|
|
|
|
78,393,042
|
|
|
|
75,849,551
|
|
Diluted
|
|
|
79,199,964
|
|
|
|
|
82,747,507
|
|
|
|
79,204,642
|
|
|
|
80,076,665
|
|
|
|
|
|
|
|
|
|
|
|
(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. This pro forma amount was calculated using the net amount
of actual expenses for the twelve-month period prior to their
separation.
|
(5)
|
|
Represents fees and expenses associated with non-recurring corporate
transactions, including $1.1 million of fees associated with the
withdrawn senior secured notes offering in the second quarter of
2014 and 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 three and six months ended June 30, 2013, represents pro
forma cash interest expense assuming EVERTEC’s April 2013
refinancing occurred on January 1, 2013, 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. For the three and six months ended June 30, 2014,
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 June 30,
|
|
Six months ended June 30,
|
(Dollar amounts in thousands)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
Segment income from operations
|
|
|
|
|
|
|
|
|
Merchant acquiring, net
|
|
$
|
8,777
|
|
|
$
|
8,161
|
|
|
$
|
17,181
|
|
|
$
|
17,395
|
|
Payment processing
|
|
|
15,314
|
|
|
|
11,720
|
|
|
|
30,031
|
|
|
|
24,480
|
|
Business solutions
|
|
|
12,113
|
|
|
|
8,784
|
|
|
|
23,537
|
|
|
|
19,318
|
|
Total segment income from operations
|
|
|
36,204
|
|
|
|
28,665
|
|
|
|
70,749
|
|
|
|
61,193
|
|
Merger related depreciation and amortization
|
|
|
|
|
|
|
|
|
and other unallocated expenses (1)
|
|
|
(10,775
|
)
|
|
|
(11,727
|
)
|
|
|
(20,431
|
)
|
|
|
(23,856
|
)
|
Income from operations
|
|
$
|
25,429
|
|
|
$
|
16,938
|
|
|
$
|
50,318
|
|
|
$
|
37,337
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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