Net 1 UEPS Technologies, Inc. Reports Third Quarter 2015 Results
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JOHANNESBURG, SOUTH AFRICA -- (Marketwired) -- 05/07/15 --
- Q3 2015 Revenue and FEPS of $151.1 million and $0.57, a constant currency increase of 18% and 30%, respectively;
- Cash and equivalents of $111.0 million as of March 31, 2015 and operating cash flow of $49.3 million in Q3 2015.
Net 1 UEPS Technologies, Inc. (NASDAQ: UEPS) (JSE: NT1) today released results for the third quarter of fiscal 2015.
Summary Financial Metrics
Three months ended March 31,
-------------------------------------
% change % change
2015 2014 in USD in ZAR
-------- -------- --------- ---------
(All figures in USD '000s except per
share data)
Revenue 151,121 138,126 9% 18%
GAAP net income 24,358 17,182 42% 53%
Fundamental net income (1) 26,519 21,688 22% 32%
GAAP earnings per share ($) 0.52 0.38 39% 50%
Fundamental earnings per share ($) (1) 0.57 0.47 21% 30%
Fully-diluted shares outstanding
('000's) 46,739 45,954 2% 2%
Average period USD1:ZAR exchange rate 11.74 10.87 8%
Nine months ended March 31,
-------------------------------------
% change % change
2015 2014 in USD in ZAR
-------- -------- --------- ---------
(All figures in USD '000s except per
share data)
Revenue 461,693 398,903 16% 25%
GAAP net income 70,821 41,527 71% 84%
Fundamental net income (1) 80,985 57,009 42% 54%
GAAP earnings per share ($) 1.51 0.91 67% 80%
Fundamental earnings per share ($) (1) 1.73 1.25 38% 50%
Fully-diluted shares outstanding
('000's) 46,907 45,997 2% 2%
Average period USD1:ZAR exchange rate 11.23 10.38 8%
(1) Fundamental net income and earnings per share are non-GAAP measures and are described below under "Use of Non-GAAP Measures--Fundamental net income and fundamental earnings per share." See Attachment B for a reconciliation of GAAP net income to fundamental net income and earnings per
share.
Factors impacting comparability of our Q3 2015 and Q3 2014 results
- Unfavorable impact from the strengthening of the USD against the ZAR: The USD appreciated by 8% against the ZAR during Q3 2015, which negatively impacted our reported results;
- Increased contribution by KSNET: Our results were positively impacted by growth in our Korean operations and a refund of $1.7 million that had been paid several years ago in connection with industry-wide litigation that has now been finalized;
- Increase in the number of SASSA grants paid: Our revenue and operating income have increased as a result of the higher number of SASSA UEPS/EMV cardholders paid during fiscal 2015 compared with 2014; and
- Continued growth in financial inclusion services: We continued to grow our financial inclusion services offerings during Q3 2015, which has resulted in higher revenues and operating income from more sales of low-margin prepaid airtime and UEPS-based lending.
Comments and Outlook
"I continue to be very positive about the future of our Group as we continue to diversify our business activities to minimize the risks that are intrinsic in customer concentration, government contracts and localized business conditions," said Dr. Serge Belamant, Chairman and CEO of Net1. "This was our overarching strategic objective and it is a testament of our staff's competence and dedication that we were able to achieve this goal whilst continuing to grow our revenue and profitability," he concluded.
"Our financial and operating performance, including the increased investment in our newer growth and international initiatives, continues to track the strategic developments in our business," said Herman Kotzé, Chief Financial Officer of Net1. "We are increasing our expected fundamental earnings per share for fiscal 2015 to at least $2.38, assuming a constant currency base of ZAR10.40/$1 and a share count of 46.5 million shares," he concluded.
Update on SASSA tender process
As ordered by the South African Constitutional Court in its April 2014 ruling, SASSA initiated a new tender process for a five-year contract relating to the payment of social grants by issuing an initial Request for Proposal ("RFP") in October 2014. Following a detailed analysis of the tender specifications, we concluded that the tender specifications were not sufficiently clear regarding a number of critical points and failed to comply with the RFP requirements specified in the Court's ruling and, in November 2014, we applied to the Court for an order setting aside the RFP and directing SASSA to issue a corrected RFP. Although the Court did not set aside the RFP, it did order SASSA to issue a draft amended RFP. SASSA issued amended RFPs on two separate occasions (in December 2014 and February 2015). We continued to object to deficiencies in the amended RFPs and made further applications to the Court setting forth our objections. In February 2015, SASSA applied to the Court for an extension of time to address our objections.
In orders dated March 19 and 24, 2015, the Court ordered SASSA to effect further amendments to the RFP to address our objections. The Court ordered that, absent further objections (1) SASSA must circulate a further amended draft RFP by April 17, 2015; (2) all bids must be submitted by May 17, 2015 and (3) SASSA shall award the new tender by October 15, 2015. The Court's April 2014 ruling does not require SASSA to award a new tender, though we expect that any decision not to make an award would be subject to judicial review and scrutiny. On April 17, 2015, SASSA issued and circulated an amended RFP to all prospective bidders. The amended RFP specifies that bidders must submit their proposals to SASSA on or before May 18, 2015 and also states that no part of the contents of the RFP may be used, copied, disclosed or conveyed in whole or in part to any party in any manner whatsoever other than for the purpose of the proposal.
We are currently analyzing the RFP to determine whether it is in the best interest of the Company to participate in the tender process or to focus on our other financial services businesses without being a contractor to SASSA. We have not yet made a final determination but expect to do so by the tender deadline. In any event, we cannot predict what the timing or ultimate outcome of the tender process will be, or if a new tender award will be made at all after the process is complete.
Results of Operations by Segment and Liquidity
Our operating metrics will be updated and posted on our website (www.net1.com).
South African transaction processing
The South African transaction processing segment consists mainly of pension and welfare benefit distribution services provided to the South African government, and transaction processing for retailers, utilities, medical-related claim service customers and banks.
Segment revenue was $58.0 million in Q3 2015, up 1% compared with Q3 2014 in USD and up 9% on a constant currency basis. In ZAR, the increase in segment revenues was primarily due to more low-margin transaction fees generated from beneficiaries using the South African National Payment System and more intersegment transaction processing activities. In addition, revenue from the distribution of social welfare grants grew modestly during the year and was in-line with the increase in unique welfare cardholder recipients, net of removal of invalid and fraudulent beneficiaries, partially offset by the loss of MediKredit revenue as a result of the sale of that business. Segment operating income margin in Q3 2015 and Q3 2014 was 23% and 16%, respectively, and has increased primarily due to more higher-margin intersegment transaction processing activities, the elimination of MediKredit losses and an increase in the number of beneficiaries paid in Q3 2015.
International transaction processing
The International transaction processing segment consists mainly of payment processing services for merchants and card issuers in South Korea. The segment also includes Zazoo start-up costs in the UK and India related to the establishment of payment solutions and transaction processing operations in these territories, transaction processing of UEPS-enabled smartcards in Botswana and transaction processing of medical-related claims in the United States.
KSNET contributes the majority of our revenues and operating income in this segment. Segment revenue was $38.3 million in Q3 2015, up 9% compared with Q3 2014 in USD and 17% on a constant currency basis. Revenue increased primarily due to higher transaction volume at KSNET during the third quarter of fiscal 2015. Operating income during Q3 2015 was higher due to increase in revenue contribution from KSNET, but partially offset by Zazoo start-up costs in the UK and India. Operating income and margin for the third quarter of fiscal 2015, was also positively impacted by a refund of approximately $1.7 million that had been paid several years ago in connection with industry-wide litigation that has now been finalized. Operating income margin for the third quarter of fiscal 2015 and 2014 was 17% and 13%, respectively, and was higher in fiscal 2015 primarily due to the refund referred to above.
Financial inclusion and applied technologies
The Financial inclusion and applied technologies segment includes our smart card accounts, lending and life insurance businesses. This segment also includes the economics from merchants and card holders using our merchant acquiring system, the sale of prepaid products (electricity and airtime) and the sale of hardware and software.
Segment revenue was $66.8 million in Q3 2015, up 19% compared with Q3 2014 in USD and 28% on a constant currency basis. Financial inclusion and applied technologies revenue and operating income increased primarily due to higher prepaid airtime sales driven by the rollout of our prepaid airtime product, an increase in the number of UEPS-based loans as we rolled out our product nationally, more ad hoc terminal and card sales and, in ZAR, an increase in intersegment revenues. Smart Life did not contribute to operating income in fiscal 2015 and 2014 due to the FSB suspension of its license. Segment operating income margin in Q3 2015 and Q3 2014 was 27% and 29%, respectively.
Corporate/eliminations
Corporate/eliminations generally includes acquisition-related intangible asset amortization; expenditure related to compliance with the Sarbanes-Oxley Act of 2002; non-employee directors' fees; employee and executive bonuses; stock-based compensation; legal fees; audit fees; directors and officers insurance premiums; telecommunications expenses; property-related expenditures including utilities, rental, security and maintenance; and elimination entries.
The decrease in our corporate expenses was primarily due to lower US government investigations-related and US lawsuit expenses, audit fees and other corporate head office-related expenses.
Cash flow and liquidity
At March 31, 2015, we had cash and cash equivalents of $111.0 million, up from $58.7 million at June 30, 2014. The increase in our cash balances from June 30, 2014, was primarily due to the expansion of all of our core businesses, and to a lesser extent due to the cash conservation resulting from the sale of loss-incurring businesses, offset by provisional tax payments and the scheduled Korean debt repayment in October 2014.
Excluding the impact of interest received, interest paid under our Korean debt and taxes, the increase in cash from operating activities resulted from improved trading activity during fiscal 2015. Capital expenditures for Q3 2015 and 2014 were $6.3 million and $4.8 million, respectively, and have increased primarily due to the acquisition of more payment processing terminals in South Korea and rollout of ATMs in South Africa.
Use of Non-GAAP Measures
US securities laws require that when we publish any non-GAAP measures, we disclose the reason for using the non-GAAP measure and provide reconciliation to the directly comparable GAAP measure. The presentation of fundamental net income and fundamental earnings per share and headline earnings per share are non-GAAP measures.
Fundamental net income and fundamental earnings per share
Fundamental net income and earnings per share is GAAP net income and earnings per share adjusted for (1) the amortization of acquisition-related intangible assets (net of deferred taxes), (2) stock-based compensation charges and (3) unusual non-recurring items, including the amortization of KSNET debt facility fees and US government investigations-related and US lawsuit expenses; as well as in fiscal 2015, a refund (net of taxes) related to Korean industry-wide litigation that has now been finalized. Management believes that the fundamental net income and earnings per share metric enhances its own evaluation, as well as an investor's understanding, of our financial performance. Attachment B presents the reconciliation between GAAP and fundamental net income and earnings per share.
Headline earnings per share ("HEPS")
The inclusion of HEPS in this press release is a requirement of our listing on the JSE. HEPS basic and diluted is calculated using net income which has been determined based on GAAP. Accordingly, this may differ to the headline earnings per share calculation of other companies listed on the JSE as these companies may report their financial results under a different financial reporting framework, including but not limited to, International Financial Reporting Standards.
HEPS basic and diluted is calculated as GAAP net income adjusted for the profit on sale of property, plant and equipment. Attachment C presents the reconciliation between our net income used to calculate earnings per share basic and diluted and HEPS basic and diluted and the calculation of the denominator for headline diluted earnings per share.
Conference Call
We will host a conference call to review Q3 2015 results on May 8, 2015, at 8:00 Eastern Time. To participate in the call, dial 1-855-481-5362 (US and Canada), 0808-162-4061 (U.K. only) or 0-800-200-648 (South Africa only) ten minutes prior to the start of the call. Callers should request "Net1 call" upon dial-in. The call will also be webcast on the Net1 homepage, www.net1.com. Please click on the webcast link at least ten minutes prior to the call. A webcast of the call will be available for replay on the Net1 website through May 31, 2015.
About Net1 (www.net1.com)
Net1 is a leading provider of alternative payment systems that leverage its Universal Electronic Payment System ("UEPS"), to facilitate biometrically secure, real-time electronic transaction processing to unbanked and under-banked populations of developing economies around the world in an online or offline environment. Net1's UEPS/EMV solution is interoperable with global EMV standards that seamlessly permit access to all the UEPS functionality in a traditional EMV environment. In addition to payments, UEPS can be used for banking, healthcare management, payroll, remittances, voting and identification.
Net1 operates market-leading payment processors in South Africa and the Republic of Korea. In addition, Net1's proprietary MVC technology offers secure mobile payments and banking services in developed and emerging countries.
Net1 has a primary listing on NASDAQ and a secondary listing on the Johannesburg Stock Exchange.
Forward-Looking Statements
This announcement contains forward-looking statements that involve known and unknown risks and uncertainties. A discussion of various factors that cause our actual results, levels of activity, performance or achievements to differ materially from those expressed in such forward-looking statements are included in our filings with the Securities and Exchange Commission. We undertake no obligation to revise any of these statements to reflect future events.
NET 1 UEPS TECHNOLOGIES, INC.
Unaudited Condensed Consolidated Statements of Operations
Three months ended Nine months ended
---------------------- ----------------------
March 31, March 31,
---------------------- ----------------------
2015 2014 2015 2014
---------- ---------- ---------- ----------
(In thousands, except (In thousands, except
per share data) per share data)
REVENUE $ 151,121 $ 138,126 $ 461,693 $ 398,903
EXPENSE
Cost of goods sold, IT
processing, servicing and
support 71,094 63,149 217,274 187,591
Selling, general and
administration 38,001 40,586 118,122 121,916
Depreciation and
amortization 10,060 10,442 30,391 30,245
---------- ---------- ---------- ----------
OPERATING INCOME 31,966 23,949 95,906 59,151
INTEREST INCOME 4,211 3,438 11,888 9,993
INTEREST EXPENSE 941 1,734 3,360 5,712
---------- ---------- ---------- ----------
INCOME BEFORE INCOME TAX
EXPENSE 35,236 25,653 104,434 63,432
INCOME TAX EXPENSE 10,305 8,535 32,156 22,119
---------- ---------- ---------- ----------
NET INCOME BEFORE EARNINGS
FROM EQUITY-ACCOUNTED
INVESTMENTS 24,931 17,118 72,278 41,313
EARNINGS FROM EQUITY-ACCOUNTED
INVESTMENTS 65 52 233 202
---------- ---------- ---------- ----------
NET INCOME 24,996 17,170 72,511 41,515
LESS (ADD) NET INCOME (LOSS)
ATTRIBUTABLE TO NON-
CONTROLLING INTEREST 638 (12) 1,690 (12)
---------- ---------- ---------- ----------
NET INCOME ATTRIBUTABLE TO
NET1 $ 24,358 $ 17,182 $ 70,821 $ 41,527
========== ========== ========== ==========
Net income per share, in
United States dollars
Basic earnings attributable
to Net1 shareholders $ 0.52 $ 0.38 $ 1.51 $ 0.91
Diluted earnings
attributable to Net1
shareholders $ 0.52 $ 0.37 $ 1.51 $ 0.90
NET 1 UEPS TECHNOLOGIES, INC.
Unaudited Condensed Consolidated Balance Sheets
Unaudited (A)
March 31, June 30,
2015 2014
----------- -----------
(In thousands, except
share data)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 111,002 $ 58,672
Pre-funded social welfare grants receivable 2,853 4,809
Accounts receivable, net of allowances of -
March: $2,347; June: $1,313 136,520 148,067
Finance loans receivable, net of allowances of -
March: $4,707; June: $3,083 44,935 53,124
Inventory 12,095 10,785
Deferred income taxes 6,828 7,451
----------- -----------
Total current assets before settlement assets 314,233 282,908
Settlement assets 651,615 725,987
----------- -----------
Total current assets 965,848 1,008,895
PROPERTY, PLANT AND EQUIPMENT, net of accumulated
depreciation of - March: $98,213; June: $91,422 48,395 47,797
EQUITY-ACCOUNTED INVESTMENTS 930 878
GOODWILL 169,433 186,576
INTANGIBLE ASSETS, net of accumulated amortization
of - March: $82,546; June: $78,781 51,665 68,514
OTHER LONG-TERM ASSETS, including reinsurance
assets 35,781 38,285
----------- -----------
TOTAL ASSETS 1,272,052 1,350,945
=========== ===========
LIABILITIES
CURRENT LIABILITIES
Accounts payable 15,341 17,101
Other payables 41,087 42,257
Current portion of long-term borrowings - 14,789
Income taxes payable 10,215 7,676
----------- -----------
Total current liabilities before settlement
obligations 66,643 81,823
Settlement obligations 651,615 725,987
----------- -----------
Total current liabilities 718,258 807,810
DEFERRED INCOME TAXES 11,841 15,522
LONG-TERM BORROWINGS 60,027 62,388
OTHER LONG-TERM LIABILITIES, including insurance
policy liabilities 20,250 23,477
----------- -----------
TOTAL LIABILITIES 810,376 909,197
----------- -----------
COMMITMENTS AND CONTINGENCIES
EQUITY
COMMON STOCK
Authorized: 200,000,000 with $0.001 par value;
Issued and outstanding shares, net of treasury
- March: 46,607,153; June: 47,819,299 64 63
PREFERRED STOCK
Authorized shares: 50,000,000 with $0.001 par
value;
Issued and outstanding shares, net of treasury:
March: -; June: - - -
ADDITIONAL PAID-IN-CAPITAL 213,264 202,401
TREASURY SHARES, AT COST: March: 18,057,228;
June: 15,883,212 (214,520) (200,681)
ACCUMULATED OTHER COMPREHENSIVE LOSS (131,415) (82,741)
RETAINED EARNINGS 593,954 522,729
----------- -----------
TOTAL NET1 EQUITY 461,347 441,771
NON-CONTROLLING INTEREST 329 (23)
----------- -----------
TOTAL EQUITY 461,676 441,748
=========== ===========
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $1,272,052 $1,350,945
=========== ===========
(A) - Derived from audited financial statements
NET 1 UEPS TECHNOLOGIES, INC.
Unaudited Condensed Consolidated Statements of Cash Flows
Three months ended Nine months ended
--------------------- ---------------------
March 31, March 31,
--------------------- ---------------------
2015 2014 2015 2014
---------- ---------- ---------- ----------
(In thousands) (In thousands)
Cash flows from operating
activities
Net income $ 24,996 $ 17,170 $ 72,511 $ 41,515
Depreciation and amortization 10,060 10,442 30,391 30,245
Earnings from equity-accounted
investments (65) (52) (233) (202)
Fair value adjustments (449) 110 (270) 49
Interest payable (23) 30 1,276 1,696
Profit on disposal of property,
plant and equipment (64) (26) (295) (42)
Stock-based compensation charge 731 922 2,682 2,820
Facility fee amortized 36 79 170 657
Decrease (Increase) in accounts
receivable, pre-funded social
welfare grants receivable and
finance loans receivable 3,379 (6,443) 5,534 (67,521)
(Increase) Decrease in inventory (26) 2,821 (2,771) 979
Increase (Decrease) in accounts
payable and other payables 4,735 2,656 (7,654) (10,895)
Increase in taxes payable 7,465 8,069 4,113 9,431
Decrease in deferred taxes (1,467) (1,141) (2,025) (3,019)
---------- ---------- ---------- ----------
Net cash provided by operating
activities 49,308 34,637 103,429 5,713
---------- ---------- ---------- ----------
Cash flows from investing
activities
Capital expenditures (6,307) (4,848) (24,822) (17,309)
Proceeds from disposal of
property, plant and equipment 163 123 777 2,124
Proceeds from sale of business - - 1,895 -
(Investment in equity in)
Repayment of loan by equity-
accounted investment - (25) - (25)
Other investing activities - 571 (29) 570
Net change in settlement assets (188,315) (277,912) 10,283 (21,409)
---------- ---------- ---------- ----------
Net cash used in investing
activities (194,459) (282,091) (11,896) (36,049)
---------- ---------- ---------- ----------
Cash flows from financing
activities
Repayment of long-term
borrowings - - (14,128) (87,008)
Long-term borrowings utilized 798 1,028 2,976 72,633
Acquisition of treasury stock - - (9,151) -
Sale of equity to non-
controlling interest - - 1,407 -
Dividends paid to non-
controlling interest (1,024) - (1,024) -
Proceeds from issue of common
stock 791 88 1,780 88
Payment of facility fee - - - (872)
Proceeds from bank overdraft - - - 24,580
Repayment of bank overdraft - (23,335) - (23,335)
Acquisition of interests in
KSNET - - - (1,968)
Net change in settlement
obligations 188,315 277,912 (10,283) 21,409
---------- ---------- ---------- ----------
Net cash provided (used in) by
financing activities 188,880 255,693 (28,423) 5,527
---------- ---------- ---------- ----------
Effect of exchange rate changes
on cash (3,708) 274 (10,780) 2,019
---------- ---------- ----------
Net increase (decrease) in cash
and cash equivalents 40,021 8,513 52,330 (22,790)
Cash and cash equivalents -
beginning of period 70,981 22,362 58,672 53,665
---------- ---------- ---------- ----------
Cash and cash equivalents - end
of period $ 111,002 $ 30,875 $ 111,002 $ 30,875
========== ========== ========== ==========
Net 1 UEPS Technologies, Inc.
Attachment A
Operating segment revenue, operating income and operating margin:
Three months ended March 31, 2015 and 2014 and December 31, 2014
Change -
constant
Change - exchange
actual rate(1)
------------- -------------
Q3 '15 Q3 '15 Q3 '15 Q3 '15
Key segmental vs vs vs vs
data, in $ '000, Q3 '15 Q3 '14 Q2 '15 Q3 '14 Q2 '15 Q3 '14 Q2 '15
-------- -------- -------- ------ ------ ------ ------
Revenue:
South African
transaction
processing $ 57,999 $ 57,397 $ 58,427 1% (1%) 9% 4%
International
transaction
processing 38,311 35,245 40,466 9% (5%) 17% (1%)
Financial
inclusion and
applied
technologies 66,830 56,226 67,531 19% (1%) 28% 4%
-------- -------- --------
Subtotal:
Operating
segments 163,140 148,868 166,424 10% (2%) 18% 3%
Intersegment
eliminations (12,019) (10,742) (12,293) 12% (2%) 21% 2%
-------- -------- --------
Consolidated
revenue $151,121 $138,126 $154,131 9% (2%) 18% 3%
======== ======== ========
Operating income:
South African
transaction
processing $ 13,218 $ 9,137 $ 12,883 45% 3% 56% 7%
International
transaction
processing 6,579 4,642 5,743 42% 15% 53% 20%
Financial
inclusion and
applied
technologies 17,906 16,459 17,827 9% 0% 17% 5%
-------- -------- --------
Subtotal:
Operating
segments 37,703 30,238 36,453 25% 3% 35% 8%
Corporate/Elimina
tions (5,737) (6,289) (5,638) (9%) 2% (1%) 6%
-------- -------- --------
Consolidated
operating
income $ 31,966 $ 23,949 $ 30,815 33% 4% 44% 9%
======== ======== ========
Operating income
margin (%)
South African
transaction
processing 23% 16% 22%
International
transaction
processing 17% 13% 14%
Financial
inclusion and
applied
technologies 27% 29% 26%
Consolidated
operating margin 21% 17% 20%
(1) - This information shows what the change in these items would have
been if the USD/ ZAR exchange rate that prevailed during the third
quarter of fiscal 2015 also prevailed during the third quarter of fiscal
2014 and the second quarter of fiscal 2015.
Nine months ended March 31, 2015 and 2014
Change -
constant
Change - exchange
actual rate(1)
---------- ----------
F2015 F2015
Key segmental data, in '000, vs vs
except margins F2015 F2014 F2014 F2014
--------- --------- ---------- ----------
Revenue:
South African transaction
processing 176,678 173,312 2% 10%
International transaction
processing 121,981 110,524 10% 19%
Financial inclusion and applied
technologies 199,558 143,502 39% 50%
--------- ---------
Subtotal: Operating segments 498,217 427,338 17% 26%
Intersegment eliminations (36,524) (28,435) 28% 39%
--------- ---------
Consolidated revenue 461,693 398,903 16% 25%
========= =========
Operating income:
South African transaction
processing 39,740 22,726 75% 89%
International transaction
processing 19,671 15,305 29% 39%
Financial inclusion and applied
technologies 53,340 42,559 25% 36%
--------- ---------
Subtotal: Operating segments 112,751 80,590 40% 51%
Corporate/Eliminations (16,845) (21,439) (21%) (15%)
--------- ---------
Consolidated operating income 95,906 59,151 62% 75%
========= =========
Operating income margin (%)
South African transaction
processing 22% 13%
International transaction
processing 16% 14%
Financial inclusion and applied
technologies 27% 30%
Overall operating margin 21% 15%
(1) - This information shows what the change in these items would have
been if the USD/ ZAR exchange rate that prevailed during the year to date
fiscal 2015 also prevailed during the year to date fiscal 2014.
Net 1 UEPS Technologies, Inc.
Attachment B
Reconciliation of GAAP net income and earnings per share, basic, to
fundamental net income and earnings per share, basic:
Three months ended March 31, 2015 and 2014
EPS, EPS,
Net income basic Net income basic
(USD'000) (USD) (ZAR'000) (ZAR)
-------------- --------- ---------------- ---------
2015 2014 2015 2014 2015 2014 2015 2014
------- ------ ---- ---- -------- ------- ---- ----
GAAP 24,358 17,182 0.52 0.38 285,520 186,842 6.13 4.08
Intangible asset
amortization, net 2,743 3,443 32,164 37,431
Refund related to
litigation finalized
in Korea, net (1,354) - (15,899) -
Stock-based
compensation charge 731 922 8,584 10,026
Facility fees for KSNET
debt 36 79 423 859
US government
investigations-related
and US lawsuit
expenses 5 62 59 674
------- ------ -------- -------
Fundamental 26,519 21,688 0.57 0.47 310,851 235,832 6.68 5.15
======= ====== ======== =======
Nine months ended March 31, 2015 and 2014
EPS, EPS,
Net income basic Net income basic
(USD'000) (USD) (ZAR'000) (ZAR)
-------------- --------- ---------------- -----------
2015 2014 2015 2014 2015 2014 2015 2014
------- ------ ---- ---- -------- ------- ----- -----
GAAP 70,821 41,527 1.51 0.91 794,973 431,054 17.00 9.42
Intangible asset
amortization, net 8,525 9,385 95,694 97,414
Stock-based
compensation charge 2,682 2,914 30,106 30,248
Refund related to
litigation finalized
in Korea, net (1,354) (15,199) -
Facility fees for
KSNET debt 170 657 1,908 6,820
US government
investigations-
related and US
lawsuit expenses 141 2,526 1,583 26,220
------- ------ -------- -------
Fundamental 80,985 57,009 1.73 1.25 909,065 591,756 19.44 12.94
======= ====== ======== =======
Net 1 UEPS Technologies, Inc.
Attachment C
Reconciliation of net income used to calculate earnings per share basic and
diluted and headline earnings per share basic and diluted:
Three months ended March 31, 2015 and 2014
2015 2014
---------- ----------
Net income (USD'000) 24,358 17,182
Adjustments:
Profit on sale of property, plant and equipment (64) (26)
Tax effects on above 18 7
---------- ----------
Net income used to calculate headline earnings
(USD'000) 24,312 17,163
========== ==========
Weighted average number of shares used to calculate
net income per share basic earnings and headline
earnings per share basic earnings ('000) 46,561 45,776
Weighted average number of shares used to calculate
net income per share diluted earnings and headline
earnings per share diluted earnings ('000) 46,739 45,954
Headline earnings per share:
Basic, in USD 0.52 0.37
Diluted, in USD 0.52 0.37
Nine months ended March 31, 2015 and 2014
2015 2014
---------- ----------
Net income (USD'000) 70,821 41,527
Adjustments:
Profit on sale of property, plant and equipment (295) (42)
Tax effects on above 83 12
---------- ----------
Net income used to calculate headline earnings
(USD'000) 70,609 41,497
========== ==========
Weighted average number of shares used to calculate
net income per share basic earnings and headline
earnings per share basic earnings ('000) 46,770 45,742
Weighted average number of shares used to calculate
net income per share diluted earnings and headline
earnings per share diluted earnings ('000) 46,907 45,997
Headline earnings per share:
Basic, in USD 1.51 0.91
Diluted, in USD 1.51 0.90
Calculation of the denominator for headline diluted earnings per share
Q3 '15 Q3 '14 F2015 F2014
------- ------- ------- -------
Basic weighted-average common shares
outstanding and unvested restricted shares
expected to vest under GAAP 46,561 45,776 46,770 45,742
Effect of dilutive securities under GAAP 178 178 137 255
------- ------- ------- -------
Denominator for headline diluted
earnings per share 46,739 45,954 46,907 45,997
======= ======= ======= =======
Weighted average number of shares used to calculate headline earnings per share diluted represent the denominator for basic weighted-average common shares outstanding and unvested restricted shares expected to vest plus the effect of dilutive securities under GAAP. We use this number of fully-diluted shares outstanding to calculate headline earnings per share diluted because we do not use the two-class method to calculate headline earnings per share diluted.
Investor Relations Contact: Dhruv Chopra Head of Investor Relations Phone: +1 917-767-6722 Email: [email protected]
Source: Net 1 UEPS Technologies, Inc.
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