JOHANNESBURG, SOUTH AFRICA–(Marketwired – Aug. 28, 2014) – Net 1 UEPS Technologies, Inc. (NASDAQ:UEPS)(JSE:NT1) today released results for the fourth quarter and full-year fiscal 2014.
Summary Financial Metrics
Three months ended June 30,
2014
2013
% change in USD
% change in ZAR
(All figures in USD ‘000s except per share data)
Revenue
182,753
117,882
55%
76%
GAAP net income
28,584
8,285
245%
291%
Fundamental net income (1)
44,386
12,598
252%
301%
GAAP earnings per share ($)
0.59
0.18
223%
266%
Fundamental earnings per share ($) (1)
0.91
0.28
225%
275%
Fully-diluted shares outstanding (‘000’s)
48,855
45,713
7%
Average period USD/ ZAR exchange rate
10.42
9.19
13%
Year ended June 30,
2014
2013
% change in USD
% change in ZAR
(All figures in USD ‘000s except per share data)
Revenue
581,656
452,147
29%
54%
GAAP net income
70,111
12,977
440%
545%
Fundamental net income (1)
100,539
34,822
189%
245%
GAAP earnings per share ($)
1.51
0.28
430%
532%
Fundamental earnings per share ($) (1)
2.16
0.76
184%
238%
Fully-diluted shares outstanding (‘000’s)
46,603
45,678
2%
Average period USD/ ZAR exchange rate
10.40
8.71
19%
(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 Q4 2014 and Q4 2013 results
- Unfavorable impact from the strengthening of the US dollar against the ZAR: The US dollar appreciated by 13% against the ZAR during Q4 2014, which negatively impacted our reported results;
- $26.6 million recovery of expenses and 2013 implementation costs: Our SASSA contract implementation is complete. In Q4 2014, we received approximately $26.6 million, or approximately $19.1 million, net of tax, from SASSA related to the recovery of additional implementation costs incurred during the beneficiary re-registration process in fiscal 2012 and 2013. Q4 2013 results include implementation-related expenditure, including smart card costs, of approximately $9.0 million;
- Fair value charge resulting from issue of equity instruments pursuant to BEE transactions: The fair value non-cash charge of $11.3 million related to our BEE transactions adversely impacted our reported results during Q4 2014;
- Increased contribution by KSNET: Our results were positively impacted by growth in our South Korean operations;
- Growth in financial services: The expansion of our financial services offering resulted in higher year-over-year revenue and operating income from UEPS-based lending during Q4 2014;
- Ad hoc hardware sales in fiscal 2014: We sold more terminals and cards during Q4 2014 as a result of ad hoc orders received from our customers; and
- Higher revenue resulting from an increase in low-margin prepaid airtime and electricity sales: Our revenue has increased as a result of the growth of our prepaid airtime offering during Q4 2014, which has lower margins compared with our other South African businesses.
Comments and Outlook
“Our results once again demonstrate our ability to implement large and complex national projects efficiently, and to rationalize our cost structure in order to drive margin improvement. We can achieve such results due to our superior technological solutions and their ability to adapt seamlessly to the ever-changing needs of our markets and our customers. More importantly, we have been able to focus our attention on our growth strategy targeting international markets. This strategy is mobile- and payment-centric, and is designed to deliver solutions that incorporate a number of “killer” applications in the space of money transfers, loyalty programs, electronic wallets and secure CNP payments,” said Dr. Serge Belamant, Chairman and CEO of Net1. “Our new streamlined operational teams are ready for significant expansion not only locally but globally as well. This new focused approach will allow us to diversify our risk profile from a geographical, currency and customer point of view. I am delighted with our personnel and their commitments, and strongly believe that we are now entering a period of sustained growth that will result in continued shareholder value creation,” he concluded.
“I am proud of our financial achievements in fiscal 2014, which have provided the catalyst for our expected growth trajectory in fiscal 2015,” said Herman Kotzé, Chief Financial Officer of Net1. “For fiscal 2015, we expect fundamental earnings per share of at least $1.92, assuming a constant currency base of ZAR 10.40/$1 and a share count of 46 million shares. Our fiscal 2014 fundamental earnings per share included approximately $0.40 related to the recovery of our SASSA implementation costs, which will not recur in fiscal 2015,” he concluded.
Transactions in preparation for any new potential SASSA tender
On August 27, 2014, we entered into a sale and subscription agreement with Business Venture Investments No 1567 (Proprietary) Limited (RF) (“BVI”), one of our BEE partners, in preparation for any new potential SASSA tender. Pursuant to the sale and subscription agreement: (i) we repurchased BVI’s remaining 1,837,432, shares of Net1 common stock for approximately $9.2 million in cash (translated at exchange rates prevailing as of August 27, 2014) and (ii) BVI has subscribed for new ordinary shares of CPS representing approximately 12.5% of CPS’ ordinary shares outstanding after the subscription for $1.4 million in cash (translated at exchange rates prevailing as of August 27, 2014). In connection with transactions described above, the CPS shareholder agreement that was negotiated as part of the original December 2013 Relationship Agreement became effective.
Change to internal reporting structure and restatement of previously reported information
In June 2014 we streamlined our operating structure and accordingly our reporting segments have been consolidated from five to three: South African transaction processing, International transaction processing and Financial inclusion and applied technologies. Previously reported information has been restated. For further information refer to Note 23 to our 2014 annual financial statements contained in our report on Form 10-K filed with the United States Securities and Exchange Commission on August 28, 2014. Attachment D presents our quarterly operating segment revenue and operating income results for fiscal 2014, 2013 and 2012.
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 $88.3 million in Q4 2014, up 52% compared with Q4 2013 in USD and up 72% on a constant currency basis. In ZAR, increase in segment revenue was primarily due to the recovery of $26.6 million in implementation costs related to our SASSA contract and more low-margin transaction fees generated from beneficiaries using the South African National Payment System. Segment operating income margin was 44% and (0)%, respectively, and increased primarily due to the recovery of SASSA implementation costs. Segment operating income margin excluding the recovery of implementation costs was 20% for Q4 2014.
International transaction processing
The International transaction processing segment consists mainly of payment processing services to merchants and card issuers in South Korea. The segment also generates transaction fee revenue from 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 $42.2 million in Q4 2014, up 17% compared with Q4 2013 in USD and 32% on a constant currency basis. Revenue increased primarily due to increased transaction processing activities in South Korea during Q4 2014. Operating income in Q4 2014 was higher due to an increase in revenue contribution from KSNET, which was partially offset by ongoing losses related to our XeoHealth launch in the United States, as well as ongoing competition in the South Korean marketplace. Segment operating income margin in Q4 2014 and Q4 2013 was 16% and 15%, respectively.
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 $64.1 million in Q4 2014, up 116% compared with Q4 2013 in USD and 146% on a constant currency basis, and increased primarily due to higher mobile-based prepaid airtime sales, an increase in the number of UEPS-based loans as we rolled out our product nationally, an increase in intersegment revenues and more ad hoc terminal and smart card sales. Segment operating income margin was 28% and 48%, respectively, and decreased primarily as a result of more low-margin prepaid airtime and hardware sales.
Corporate/eliminations
Corporate/eliminations includes our head office cost center, the amortization of acquisition-related intangible assets and once-off events, including in 2014, the equity instrument charges related to our BEE transactions, and the net loss for the deconsolidation of subsidiaries and businesses.
The increase in our corporate expenses resulted primarily from the non-cash charge related to the equity instruments issued pursuant to our BEE transactions, increases in general corporate audit fees, executive emoluments and other corporate head office-related expenses, all of which were partially offset by lower US government investigation and US lawsuit expenses.
Cash flow and liquidity
At June 30, 2014, we had cash and cash equivalents of $58.7 million, up from $53.7 million at June 30, 2013. The increase in our cash balances from June 30, 2013, was primarily due to higher cash generated from our core business and the recovery of implementation costs from SASSA, which was partially offset by higher corporate tax payments, the expansion of our UEPS-based lending business, acquisition of terminals to maintain and expand our South Korean business activities, the repayment of a portion of our South Korean debt and acquisition of substantially all of the remaining shares of KSNET that we did not already own.
Excluding the impact of interest received, interest paid under our South Korean debt, taxes and recovery of implementation costs from SASSA, the decrease in cash from operating activities resulted from the expansion of our UEPS-based lending book, offset by cash inflows from improved trading activity and the substantial elimination of implementation costs in fiscal 2014. Capital expenditures for Q4 2014 and 2013 were $6.6 million and $5.6 million, respectively, and have increased primarily due to the acquisition of more payment processing terminals in South Korea.
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, transaction-related costs and US government investigations-related and US lawsuit expenses; as well as in fiscal 2014, the equity instruments charged related to our December 2013 BEE transactions and the net loss on deconsolidation of subsidiaries and business, net of tax. 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, and, in 2014, the net loss on deconsolidation of subsidiaries and asset group, net of related tax effects. 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 Q4 2014 results on August 29, 2014, 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 September 21, 2014.
Fiscal 2015 earnings call dates
We expect to host quarterly conference calls to review our fiscal 2015 quarterly results in accordance with the schedule provided in the table below:
Conference call to review quarter ended:
Tentative date
September 30, 2014 (Q1, 2015)
November 7, 2014
December 31, 2014 (Q2, 2015)
February 6, 2015
March 31, 2015 (Q3, 2015)
May 8, 2015
June 30, 2015 (Q4, 2015)
August 21, 2015
The dates provided above are tentative and we will confirm the final dates and dial-in details closer to the quarterly conference call date.
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.
Unaudited
(A)
Three months ended
Year ended
June 30,
June 30,
2014
2013
2014
2013
(In thousands, except per share data)
(In thousands, except per share data)
REVENUE
$
182,753
$
117,882
$
581,656
$
452,147
EXPENSE
Cost of goods sold, IT processing, servicing and support
72,641
53,045
260,232
196,834
Selling, general and administration
46,156
41,698
168,072
191,552
Equity instruments issued pursuant to BEE transactions
11,268
–
11,268
–
Depreciation and amortization
10,041
9,548
40,286
40,599
OPERATING INCOME
42,647
13,591
101,798
23,162
INTEREST INCOME
4,824
3,888
14,817
12,083
INTEREST EXPENSE
1,761
1,849
7,473
7,966
INCOME BEFORE INCOME TAX EXPENSE
45,710
15,630
109,142
27,279
INCOME TAX EXPENSE
17,260
7,484
39,379
14,656
NET INCOME BEFORE EARNINGS FROM EQUITY-ACCOUNTED INVESTMENTS
28,450
8,146
69,763
12,623
EARNINGS FROM EQUITY-ACCOUNTED INVESTMENTS
96
147
298
351
NET INCOME
28,546
8,293
70,061
12,974
ADD (LESS) NET LOSS (INCOME) ATTRIBUTABLE TO NON-CONTROLLING INTEREST
(38)
8
(50)
(3)
NET INCOME ATTRIBUTABLE TO NET1
$
28,584
$
8,285
$
70,111
$
12,977
Net income per share, in United States dollars
Basic earnings attributable to Net1 shareholders
$0.59
$0.18
$1.51
$0.28
Diluted earnings attributable to Net1 shareholders
$0.59
$0.18
$1.50
$0.28
(A) – Derived from audited financial statements
(A)
(A)
June 30,
June 30,
2014
2013
(In thousands, except share data)
ASSETS
CURRENT ASSETS
Cash and cash equivalents
$
58,672
$
53,665
Pre-funded social welfare grants receivable
4,809
2,934
Accounts receivable, net of allowances
148,067
102,614
Finance loans receivable, net of allowances
53,124
8,350
Inventory
10,785
12,222
Deferred income taxes
7,451
4,938
Total current assets before settlement assets
282,908
184,723
Settlement assets
725,987
752,476
Total current assets
1,008,895
937,199
PROPERTY, PLANT AND EQUIPMENT, net
47,797
48,301
EQUITY-ACCOUNTED INVESTMENTS
878
1,183
GOODWILL
186,576
175,806
INTANGIBLE ASSETS, net
68,514
77,257
OTHER LONG-TERM ASSETS, including reinsurance assets
38,285
36,576
TOTAL ASSETS
1,350,945
1,276,322
40,570
LIABILITIES
CURRENT LIABILITIES
Accounts payable
17,101
26,567
Other payables
42,257
33,808
Current portion of long-term borrowings
14,789
14,209
Income taxes payable
7,676
2,275
Total current liabilities before settlement obligations
81,823
76,859
Settlement obligations
725,987
752,476
Total current liabilities
807,810
829,335
DEFERRED INCOME TAXES
15,522
18,727
LONG-TERM BORROWINGS
62,388
66,632
OTHER LONG-TERM LIABILITIES, including insurance policy liabilities
23,477
21,659
TOTAL LIABILITIES
909,197
936,353
COMMITMENTS AND CONTINGENCIES
EQUITY
COMMON STOCK
Authorized: 200,000,000 with $0.001 par value;
Issued and outstanding shares, net of treasury – 2014: 47,819,299; 2013: 45,592,550
63
59
PREFERRED STOCK
Authorized shares: 50,000,000 with $0.001 par value;
Issued and outstanding shares, net of treasury: 2014: -; 2013: –
–
–
ADDITIONAL PAID-IN-CAPITAL
202,401
160,670
TREASURY SHARES, AT COST: 2014: 15,883,212; 2013: 13,455,090
(200,681)
(175,823)
ACCUMULATED OTHER COMPREHENSIVE LOSS
(82,741)
(100,858)
RETAINED EARNINGS
522,729
452,618
TOTAL NET1 EQUITY
441,771
336,666
NON-CONTROLLING INTEREST
(23)
3,303
TOTAL EQUITY
441,748
339,969
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
$
1,350,945
$
1,276,322
(A) – Derived from audited financial statements
Unaudited
A
Three months ended
Year ended
June 30,
June 30,
2014
2013
2014
2013
(In thousands)
(In thousands)
Cash flows from operating activities
Net income
$
28,546
$
8,293
$
70,061
$
12,974
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
10,041
9,548
40,286
40,599
Earnings from equity-accounted investments
(96)
(147)
(298)
(351)
Fair value adjustment
(104)
223
(55)
631
Interest payable
404
950
2,100
4,313
Facility fee amortized
81
67
738
302
(Profit) Loss on disposal of property, plant and equipment
(392)
193
(434)
110
Loss on deconsolidation of subsidiaries and business
55
–
55
–
Stock compensation charge, net of forfeitures
898
582
3,718
3,907
Fair value of BEE equity instruments granted
11,268
–
11,268
–
Increase in accounts and finance loans receivable, and pre-funded grants receivable
(33,926)
(1,739)
(101,447)
(5,726)
(Increase) Decrease in inventory
(199)
(630)
780
(2,890)
Increase in accounts payable and other payables
23,566
9,868
12,671
8,113
(Decrease) Increase in taxes payable
(3,908)
(3,102)
5,523
(2,748)
(Decrease) Increase in deferred taxes
(4,802)
816
(7,821)
(3,317)
Net cash provided by operating activities
31,432
24,922
37,145
55,917
Cash flows from investing activities
Capital expenditures
(6,597)
(5,644)
(23,906)
(22,747)
Proceeds from disposal of property, plant and equipment
866
123
2,990
510
Net cash outflow from sale of MediKredit
(669)
–
(669)
–
Proceeds from sale of business
186
–
186
–
Capital reduction/ repayment of loan by equity-accounted investment
564
–
539
3
Acquisitions, net of cash acquired
–
–
–
(2,143)
Other investing activities, net
–
–
570
545
Net change in settlement assets
20,059
(255,565)
(1,350)
(423,984)
Net cash provided by (used in) investing activities
14,409
(261,086)
(21,640)
(447,816)
Cash flows from financing activities
Repayment of long-term borrowings
–
(7,201)
(87,008)
(14,508)
Long-term borrowings obtained
1,044
–
73,677
–
Proceeds from bank overdraft
–
–
24,580
–
Repayment of bank overdraft
–
–
(23,335)
–
Acquisition of interests in KSNET
–
–
(1,968)
–
Payment of facility fee
–
–
(872)
–
Proceeds from issue of common stock
110
–
198
240
Net change in settlement obligations
(20,059)
255,565
1,350
423,984
Net cash (used in) provided by financing activities
(18,905)
248,364
(13,378)
409,716
Effect of exchange rate changes on cash
861
(1,151)
2,880
(3,275)
Net increase in cash and cash equivalents
27,797
11,049
5,007
14,542
Cash and cash equivalents – beginning of period
30,875
42,616
53,665
39,123
Cash and cash equivalents – end of period
$
58,672
$
53,665
$
58,672
$
53,665
(A) – Derived from audited financial statements
Net 1 UEPS Technologies, Inc.
Attachment A
Operating segment revenue, operating income and operating margin:
Three months ended June 30, 2014 and 2013 and March 31, 2014
Change – actual
Change – constant exchange rate(1)
Key segmental data, in $ ‘000,
Q4 ’14
Q4 ’13
Q3 ’14
Q4 ’14
vs
Q4’13
Q4 ’14
vs
Q3 ’14
Q4 ’14
vs
Q4’13
Q4 ’14
vs
Q3 ’14
Revenue:
South African transaction processing
$88,265
$58,196
$57,397
52%
54%
72%
47%
International transaction processing
42,201
36,193
35,245
17%
20%
32%
15%
Financial inclusion and applied technologies
64,093
29,609
56,226
116%
14%
146%
9%
Subtotal: Operating segments
194,559
123,998
148,868
57%
31%
78%
25%
Intersegment eliminations
(11,806)
(6,116)
(10,742)
93%
10%
119%
5%
Consolidated revenue
$182,753
$117,882
$138,126
55%
32%
76%
27%
Operating income (loss):
South African transaction processing
$38,675
($197)
$9,137
nm
323%
nm
306%
International transaction processing
6,647
5,263
4,642
26%
43%
43%
37%
Financial inclusion and applied technologies
18,126
14,254
16,459
27%
10%
44%
6%
Subtotal: Operating segments
63,448
19,320
30,238
228%
110%
273%
101%
Corporate/Elimi-nations
(20,801)
(5,729)
(6,289)
263%
231%
312%
217%
Consolidated operating income (loss)
$42,647
$13,591
$23,949
214%
78%
256%
71%
Operating income margin (%)
South African transaction processing
44%
(0%)
16%
International transaction processing
16%
15%
13%
Financial inclusion and applied technologies
28%
48%
29%
Consolidated operating margin
23%
12%
17%
(1) – This information shows what the change in these items would have been if the USD/ ZAR exchange rate that prevailed during the fourth quarter of fiscal 2014 also prevailed during the fourth quarter of fiscal 2013 and the third quarter of fiscal 2014.
Year ended June 30, 2014 and 2013
Change – actual
Change – constant exchange rate(1)
Key segmental data, in ‘000, except margins
F2014
F2013
F2014
vs
F2013
F2014
vs
F2013
Revenue:
South African transaction processing
$261,577
$242,739
8%
29%
International transaction processing
152,725
135,954
12%
34%
Financial inclusion and applied technologies
207,595
108,001
92%
129%
Subtotal: Operating segments
621,897
486,694
28%
53%
Intersegment eliminations
(40,241)
(34,547)
16%
39%
Consolidated revenue
$581,656
$452,147
29%
54%
Operating income (loss):
South African transaction processing
$61,401
($21,316)
nm
nm
International transaction processing
21,952
14,208
55%
84%
Financial inclusion and applied technologies
60,685
57,491
6%
26%
Subtotal: Operating segments
144,038
50,383
186%
241%
Corporate/Eliminations
(42,240)
(27,221)
55%
85%
Consolidated operating income (loss)
$101,798
$23,162
340%
425%
Operating income margin (%)
South African transaction processing
23%
(9%)
International transaction processing
14%
10%
Financial inclusion and applied technologies
29%
53%
Overall operating margin
18%
5%
(1) – This information shows what the change in these items would have been if the USD/ ZAR exchange rate that prevailed during fiscal 2014 also prevailed during fiscal 2013.
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 June 30, 2014 and 2013
Net income
(USD’000)
EPS,
basic
(USD)
Net income
(ZAR’000)
EPS,
basic
(ZAR)
2014
2013
2014
2013
2014
2013
2014
2013
GAAP
28,584
8,285
0.59
0.18
297,897
76,109
6.12
1.67
Intangible asset amortization, net
2,960
2,888
30,842
26,520
Stock-based compensation charge
922
582
9,609
5,346
Facility fees for KSNET debt
79
67
823
615
US government investigations-related and US lawsuit expenses
53
776
552
7,129
BEE equity instruments charge
11,268
–
118,740
–
Net loss on deconsolidation of subsidiaries and business, net of tax
443
–
4,617
–
Transaction-related costs
77
–
806
–
Fundamental
44,386
12,598
0.91
0.28
463,886
115,719
9.53
2.54
Year ended June 30, 2014 and 2013
Net income
(USD’000)
EPS, basic
(USD)
Net income
(ZAR’000)
EPS,
basic
(ZAR)
2014
2013
2014
2013
2014
2013
2014
2013
GAAP
70,111
12,977
1.51
0.28
728,916
113,035
15.68
2.48
Intangible asset amortization, net
12,490
13,679
129,846
119,155
Stock-based compensation charge
2,914
3,907
30,296
34,032
Facility fees for KSNET debt
657
302
6,831
2,631
US government investigations-related and US lawsuit expenses
2,579
3,888
26,813
33,866
BEE equity instruments charge
11,268
–
118,740
–
Net loss on deconsolidation of subsidiaries and business, net of tax
443
–
4,606
–
Transaction-related costs
77
69
806
601
Fundamental
100,539
34,822
2.16
0.76
1,046,854
303,320
22.52
6.66
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 June 30, 2014 and 2013
2014
2013
Net income (USD’000)
28,584
8,285
Adjustments:
Loss on deconsolidation of subsidiaries and business
55
–
(Profit) Loss on sale of property, plant and equipment
(392)
193
Tax effects on above
(287)
(54)
Net income used to calculate headline earnings (USD’000)
27,960
8,424
Weighted average number of shares used to calculate net income per share basic earnings and headline earnings per share basic earnings (‘000)
48,695
45,593
Weighted average number of shares used to calculate net income per share diluted earnings and headline earnings per share diluted earnings (‘000)
48,855
45,713
Headline earnings per share:
Basic, in USD
0.57
0.18
Diluted, in USD
0.57
0.18
Year ended June 30, 2014 and 2013
2014
2013
Net income (USD’000)
70,111
12,977
Adjustments:
Loss on deconsolidation of subsidiaries and business
55
–
(Profit) Loss on sale of property, plant and equipment
(434)
110
Tax effects on above
(276)
(31)
Net income used to calculate headline earnings (USD’000)
69,456
13,056
Weighted average number of shares used to calculate net income per share basic earnings and headline earnings per share basic earnings (‘000)
46,484
45,553
Weighted average number of shares used to calculate net income per share diluted earnings and headline earnings per share diluted earnings (‘000)
46,603
45,678
Headline earnings per share:
Basic, in USD
1.49
0.29
Diluted, in USD
1.49
0.29
Calculation of the denominator for headline diluted earnings per share
Q4 ’14
Q4 ’13
F2014
F2013
Basic weighted-average common shares outstanding and unvested restricted shares expected to vest under GAAP
48,695
45,593
46,484
45,553
Effect of dilutive securities under GAAP
160
120
119
125
Denominator for headline diluted earnings per share
48,855
45,713
46,603
45,678
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.
Net 1 UEPS Technologies, Inc.
Attachment D
Presentation of quarterly revenue and operating income by segment for fiscal 2012 to 2014
The tables below present quarterly revenue and operating income generated by our three reportable segments for the fiscal 2014, 2013 and 2012, and reconciliations to consolidated revenue and operating income (loss), as well as the US dollar/ ZAR exchange rates applicable per fiscal quarter and year:
In United States Dollars (US GAAP)
Fiscal 2014
Operating Segment
Quarter 1
$ ‘000
Quarter 2
$ ‘000
Quarter 3
$ ‘000
Quarter 4
$ ‘000
Full
Year
$ ‘000
Revenue:
South African transaction processing
57,161
58,754
57,397
88,265
261,577
International transaction processing
37,541
37,738
35,245
42,201
152,725
Financial inclusion and applied technologies
36,796
50,480
56,226
64,093
207,595
Subtotal: Operating segments
131,498
146,972
148,868
194,559
621,897
Intersegment eliminations
(8,004)
(9,689)
(10,742)
(11,806)
(40,241)
Consolidated revenue
123,494
137,283
138,126
182,753
581,656
Operating (loss) income:
South African transaction processing
6,461
7,128
9,137
38,675
61,401
International transaction processing
5,524
5,139
4,642
6,647
21,952
Financial inclusion and applied technologies
12,835
13,265
16,459
18,126
60,685
Subtotal: Operating segments
24,820
25,532
30,238
63,448
144,038
Corporate/Eliminations
(8,420)
(6,730)
(6,289)
(20,801)
(42,240)
Consolidated operating income
16,400
18,802
23,949
42,647
101,798
Income and expense items: $1 = ZAR
10.00
10.16
10.87
10.42
10.40
In United States Dollars (US GAAP)
Fiscal 2013
Operating Segment
Quarter 1
$ ‘000
Quarter 2
$ ‘000
Quarter 3
$ ‘000
Quarter 4
$ ‘000
Full
Year
$ ‘000
Revenue:
South African transaction processing
62,420
61,708
60,415
58,196
242,739
International transaction processing
32,397
33,664
33,700
36,193
135,954
Financial inclusion and applied technologies
26,615
25,563
26,214
29,609
108,001
Subtotal: Operating segments
121,432
120,935
120,329
123,998
486,694
Intersegment eliminations
(9,750)
(9,493)
(9,188)
(6,116)
(34,547)
Consolidated revenue
111,682
111,442
111,141
117,882
452,147
Operating (loss) income:
South African transaction processing
(3,299)
(6,233)
(11,587)
(197)
(21,316)
International transaction-based activities
3,329
3,583
2,033
5,263
14,208
Financial inclusion and applied technologies
14,913
14,286
14,038
14,254
57,491
Subtotal: Operating segments
14,943
11,636
4,484
19,320
50,383
Corporate/Eliminations
(5,618)
(6,664)
(9,210)
(5,729)
(27,221)
Consolidated operating income (loss)
9,325
4,972
(4,726)
13,591
23,162
Income and expense items: $1 = ZAR
8.26
8.74
8.47
9.19
8.71
In United States Dollars (US GAAP)
Fiscal 2012
Operating Segment
Quarter 1
$ ‘000
Quarter 2
$ ‘000
Quarter 3
$ ‘000
Quarter 4
$ ‘000
Full
Year
$ ‘000
Revenue:
South African transaction processing
45,632
43,985
43,753
61,260
194,630
International transaction processing
31,053
29,446
28,635
31,491
120,625
Financial inclusion and applied technologies
24,454
19,771
19,591
26,976
90,792
Subtotal: Operating segments
101,139
93,202
91,979
119,727
406,047
Intersegment eliminations
(1,213)
(1,144)
(1,315)
(12,111)
(15,783)
Consolidated revenue
99,926
92,058
90,664
107,616
390,264
Operating (loss) income:
South African transaction processing
17,001
13,549
5,590
(2,234)
33,906
International transaction processing
4,346
3,519
3,295
3,489
14,649
Financial inclusion and applied technologies
11,968
9,479
9,078
15,359
45,884
Subtotal: Operating segments
33,315
26,547
17,963
16,614
94,439
Corporate/Eliminations
(2,469)
(6,319)
(5,485)
(19,016)
(33,289)
Consolidated operating income (loss)
30,846
20,228
12,478
(2,402)
61,150
Income and expense items: $1 = ZAR
7.09
8.18
7.85
8.03
7.72
