Net 1 UEPS Technologies, Inc. Announces 2010 Second Quarter Results
JOHANNESBURG, Feb. 9 /PRNewswire-FirstCall/ -- Net 1 UEPS Technologies, Inc. ("Net1" or the "Company") (Nasdaq: UEPS; JSE: NT1) today announced results for the three and six months ended December 31, 2009. Revenue during 2Q 2010 was $73.9 million, a year over year increase of 20% in US dollars ("USD") and a decline of 8% in constant currency. Earnings per share under US generally accepted accounting principles ("GAAP") in 2Q 2010 was $0.42 versus $0.49 a year ago, a decline of 14% in USD and 34% in constant currency. Fundamental earnings per share for 2Q 2010 was $0.51 compared to $0.36 in the 2Q 2009, representing an increase of 42% in USD and 8% in constant currency.
Revenue during the first half of fiscal 2010 ("F2010") was $139.4 million, a year over year increase of 8% in US dollars ("USD") and a decline of 6% in constant currency compared to the first half of fiscal 2009 ("F2009"). Earnings per share under US generally accepted accounting principles ("GAAP") during F2010 was $0.79 versus $0.94 a year ago, a decline of 16% in USD and 27% in constant currency. Fundamental earnings per share for F2010 was $0.96 compared to $0.75 for F2009, representing an increase of 28% in USD and 12% in constant currency.
Summary Financial Metrics
Three months ended December 31,
-------------------------------
% change % change
2009 2008 in USD in ZAR
---- ---- --------- ---------
(All figures in USD '000s
except per share data)
Revenue 73,864 61,388 20% (8)%
GAAP net income 19,284 27,762 (31)% (47)%
Fundamental net income (1) 23,239 20,186 15% (12)%
GAAP earnings per
share ($) (2) 0.42 0.49 (14)% (34)%
Fundamental earnings per
share ($) (1) (2) 0.51 0.36 42% 8%
Fully diluted shares
outstanding ('000's) (2) 45,378 57,068 (20)%
Average period USD/ ZAR
exchange rate 7.52 9.96 (23)%
Six months ended December 31,
-----------------------------
% change % change
2009 2008 (2) in USD in ZAR
---- -------- --------- ---------
(All figures in USD '000s
except per share data)
Revenue 139,378 129,323 8% (6)%
GAAP net income 37,225 54,006 (31)% (40)%
Fundamental net income (1)
(2) 45,042 42,834 5% (9)%
GAAP earnings per share ($)
(2) 0.79 0.94 (16)% (27)%
Fundamental earnings per
share ($) (1) (2) 0.96 0.75 28% 12%
Fully diluted shares
outstanding ('000's) 47,253 57,777 (18)%
Average period USD/ ZAR
exchange rate 7.67 8.80 (13)%
(1) Fundamental net income and earnings per share is GAAP net income and earnings per share excluding the amortization of acquisition-related intangible assets, net of deferred taxes, and stock-based compensation charges. In addition, the calculation of fundamental net income and earnings per share for 2Q 2009 and the first six months of F2010 also excludes the effects of the change in the Company's fully distributed tax rate from 35.45% to 34.55%, JSE Limited ("JSE") listing costs, a bank facility fee, goodwill impairment and a foreign exchange gain, net of tax, related to a short-term investment.
(2) GAAP basic and fundamental earnings per share for 2Q 2009 and F2009, have been retrospectively adjusted, as required by FSP EITF 03-6-1 (Topic 260), to include participating securities in the weighted average number of outstanding shares of common stock.
The following factors had significant impact on the comparability of Net1's 2Q 2010 results to last year:
- Favorable impact from the weakness of the US dollar: The US dollar depreciated by 23% compared to the ZAR during the second quarter of fiscal 2010 compared to fiscal 2009 which has had a positive impact on the Company's reported results;
- Cost management and improvement in merchant adoption in our pension and welfare operations: The Company's second quarter of fiscal 2010 results were favorably impacted by cost management controls and continued increases in merchant adoption;
- Increased transaction volumes at EasyPay: The Company's reported results were favorably impacted by increased transaction volumes at EasyPay resulting from growth in value-added services and higher than expected activity at retailers during the Christmas season;
- Increased user adoption in Iraq: The Company's reported results were positively impacted by increased transaction revenues from the adoption of its UEPS technology in Iraq;
- Lower revenues and margins from hardware, software and related technology sales segment: The Company's hardware, software and related technology sales segment was adversely impacted by fewer ad hoc sales to the Bank of Ghana, lower revenues and overall margin generated by Net1 Universal Technologies (Austria) AG ("Net1 UAT") and weaker demand for its products as well as pricing pressures resulting from the global recession, but partially offset by hardware sales to Iraq;
- Intangible asset amortization related to acquisition: The Company's reported results were adversely impacted by additional intangible asset amortization of approximately $0.5 million related to the RMT Systems (Pty) Ltd ("RMT") acquisition, which closed in April 2009; and
- Non-recurring items: During the second quarter of fiscal 2009 the Company recognized a foreign exchange gain of $20.6 million (ZAR 202.3 million) resulting from an asset swap arrangement and the Company impaired goodwill with a value of $1.8 million (ZAR 18.0 million).
Comments and Outlook
"I am extremely pleased with our second quarter results, which demonstrate the strength of our business model and the power of our technology," said Dr. Serge Belamant, Chairman and Chief Executive Officer of Net1. "While we faced difficult year-over-year comparisons from our hardware, software and related technology sales segment, and last year's large foreign exchange gain, we continue to grow both revenue and profitability in our core transaction-based businesses. We remain an integral distributor of welfare grants for the South African government, and over the next few years, we have a much clearer path to drive the globalization of our technology. We remain committed to delivering sustainable growth for all of our stake holders, and to that effect I am pleased to announce that our Board has authorized a new $50 million share repurchase program," he concluded.
"We remain comfortable with our guidance of at least 20% constant currency fundamental earnings per share growth for fiscal year 2010," said Herman Kotze, Chief Financial Officer of Net1. "Our growth during 2Q 2010 was driven by EasyPay, Iraq and the further penetration of our merchant acquiring platform," he concluded.
Results of Operations
Net1's frequently asked questions and operating metrics will be updated and posted on the Company's website (www.net1.com).
Transaction-based activities
Transaction-based activities revenue was $45.4 million, up 38% compared with 2Q 2009 in USD and 6% on a constant currency basis. Revenue increased as a result of increased transaction volumes at EasyPay and a modest contribution from our pension and welfare operations. Operating margin increased to 59% from 54% during 2Q 2009 primarily due to cost management and continued increases in merchant adoption in our pension and welfare operations, increased transaction fees from the utilization of our UEPS system in Iraq and improved margins at EasyPay. Excluding amortization of intangibles for EasyPay and RMT, segment operating margin was 61% compared with 55% during 2Q 2009.
Smart card accounts
Smart card account revenue was $8.1 million, up 21% compared with 2Q 2009 in USD and 7% lower on a constant currency basis. Operating margin for the segment remained consistent at 45% for 2Q 2010 and 2Q 2009.
Financial services
Financial services revenue was $0.9 million, down 40% compared with 2Q 2009 in USD and 54% on a constant currency basis, principally due to the divestiture of the Company's traditional microlending business in 3Q 2009. Operating margin for the operating segment however, improved significantly to 64% from (110)% in 2Q 2009 as a result of the sale of this low-margin business, and higher profitability in our underlying UEPS-based lending activities.
Hardware, software and related technology sales
Hardware, software and related technology sales revenue was $19.5 million, down 5% compared with 2Q 2009 in USD and 27% on a constant currency basis. The decrease in revenue and operating income is primarily due to lower revenues at Net1 UAT and lower ad hoc hardware and software development sales in 2010 as compared with the prior year when we recorded revenue from sales under our Ghana contract, offset marginally by increased hardware sales to Iraq. As a result operating margin for the operating segment decreased to 9% from 27% in 2Q 2009. Excluding amortization of all intangibles, segment operating margin was 22% compared to 41% during 2Q 2009.
Cash flow and liquidity
At December 31, 2009, the Company had cash and equivalents of $153 million, down from $221 million at June 30, 2009. For 2Q 2010, the Company generated operating cash flow of $13.8 million compared to $45.9 million in 2Q 2009. The decrease in operating cash flow results primarily from the foreign exchange gain realized during 2Q 2009. Capital expenditures for 2Q 2010 and 2009 were $0.7 million and $0.4 million, respectively. Capital expenditures for each of F2010 and F2009 were approximately $1.3 million and $3.3 million. For F2010, the Company generated operating cash flow of $50.7 million compared to $12.9 million in F2009.
Share repurchase authorization
On February 5, 2010, the Company's Board of Directors authorized the repurchase of up to $50 million of the Company's common stock. The authorization does not have an expiration date.
The share repurchase authorization will be used at management's discretion, subject to limitations imposed by SEC Rule 10b-18 and other legal requirements and subject to price and other internal limitations established by the Board. Repurchases will be funded from the Company's available cash. Share repurchases may be made through open market purchases, privately negotiated transactions, or both. There can be no assurance that the Company will purchase any shares or any particular number of shares.
The authorization may be suspended, terminated or modified at any time for any reason, including market conditions, the cost of repurchasing shares, liquidity and other factors that management deems appropriate.
MediKredit Closing
In January 2010, the Company acquired 100% of MediKredit Integrated Healthcare Solutions (Pty) Ltd ("MediKredit") for ZAR 74 million (approximately $10 million) in cash after all regulatory approvals were obtained. MediKredit is a South African private company that offers transaction processing, financial and clinical risk management solutions to both funders and providers of healthcare.
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
Under GAAP, the Company is required to fair value all intangible assets on the date of the acquisition and amortize these intangible assets over their expected useful lives. In addition, under GAAP, the Company is required to measure the fair value of options and other stock-based awards, and recognize a stock-based compensation charge over the requisite service period. The Company's GAAP net income and earnings per share for the three and six months December 31, 2009 and 2008, include amortization of intangibles and stock-based compensation, as well as, in 2008, JSE listing costs, a bank facility fee, goodwill impairment and a foreign exchange gain, net of tax, related to a short-term investment. Finally, the effect of the change in the fully distributed tax rate from 35.45% to 34.55% in July 2008 was included in net income and earnings per share for the six months ended December 31, 2008. The Company excludes all of the above-mentioned amounts when calculating fundamental net income and earnings per share, because management believes that these adjustments enhance its own evaluation, as well as an investor's understanding, of the Company's 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 loss (profit) on sale of property, plant and equipment, 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.
Conference Call
Net1 will host a conference call to review second quarter results on February 10, 2010, at 8:00 a.m. Eastern Time. To participate in the call, dial 1-800-860-2442 (US only), 1-866-605-3852 (Canada only), 0-800-917-7042 (UK only) or 0-800-200-648 (South Africa only) five 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 10 minutes prior to the call. A webcast of the call will be available for replay on the Net1 website through March 3, 2010.
About Net1 (www.net1.com)
Net1 provides its universal electronic payment system, or UEPS, as an alternative payment system for the unbanked and under-banked populations of developing economies. Our market-leading system enables the estimated four billion people who generally have limited or no access to a bank account, to enter affordably into electronic transactions with each other, government agencies, employers, merchants and other financial service providers. Our universal electronic payment system, or UEPS, uses smart cards that operate in real-time but offline, unlike traditional payment systems offered by major banking institutions that require immediate access through a communications network to a centralized computer. This offline capability means that users of the Net1 system can enter into transactions at any time with other card holders even in the most remote areas so long as a portable offline smart card reader is available. In addition to payments and purchases, UEPS can be used for banking, healthcare management, international money transfers, voting and identification.
Net1 also focuses on the development and provision of secure transaction technology, solutions and services and offers transaction processing, financial and clinical risk management solutions to both funders and providers of healthcare. Its core competencies around secure online transaction processing, cryptography and integrated circuit card (chip/smart card) technologies are principally applied to electronic commerce transactions in the telecommunications, banking, retail, petroleum and utilities market sectors.
Net1 has a primary listing on the Nasdaq and a secondary listing on the JSE Limited.
Forward-Looking Statements
This announcement contains forward-looking statements that involve known and unknown risks and uncertainties. A discussion of various factors that cause the Company's actual results, levels of activity, performance or achievements to differ materially from those expressed in such forward-looking statements are included in the Company's filings with the Securities and Exchange Commission. The Company undertakes no obligation to revise any of these statements to reflect future circumstances or the occurrence of unanticipated events.
Investor Relations Contact: |
|
Dhruv Chopra |
|
Vice President of Investor Relations |
|
Phone: +1-212-626-6675 |
|
Email: [email protected] |
|
NET 1 UEPS TECHNOLOGIES, INC.
Unaudited Condensed Consolidated Statements of Operations
Three months Six months
ended ended
----- -----
December 31, December 31,
------------ ------------
2009 2008 2009 2008
---- ---- ---- ----
(In thousands, (In thousands,
except per share data) except per share data)
REVENUE $73,864 $61,388 $139,378 $129,323
EXPENSE
Cost of goods
sold, IT
processing,
servicing and
support 20,915 17,175 37,742 36,411
Selling, general
and
administration 18,866 15,311 36,606 33,309
Depreciation and
amortization 4,664 4,261 9,243 7,684
IMPAIRMENT OF
GOODWILL - 1,836 - 1,836
--- ----- --- -----
OPERATING INCOME 29,419 22,805 55,787 50,083
FOREIGN EXCHANGE
GAIN RELATED TO
SHORT-TERM
INVESTMENT - 20,581 - 26,657
INTEREST INCOME,
net 1,893 2,303 4,264 5,465
----- ----- ----- -----
INCOME BEFORE
INCOME TAXES 31,312 45,689 60,051 82,205
INCOME TAX EXPENSE 11,492 16,999 22,523 26,901
------ ------ ------ ------
NET INCOME FROM
CONTINUING
OPERATIONS BEFORE
LOSS FROM EQUITY-
ACCOUNTED
INVESTMENTS 19,820 28,690 37,528 55,304
LOSS FROM EQUITY-
ACCOUNTED
INVESTMENTS (270) (226) (381) (536)
---- ---- ---- ----
NET INCOME 19,550 28,464 37,147 54,768
LESS(ADD): NET
INCOME (LOSS)
ATTRIBUTABLE TO
NON-CONTROLLING
INTEREST 266 702 (78) 762
--- --- --- ---
NET INCOME
ATTRIBUTABLE TO
NET1 $19,284 $27,762 $37,225 $54,006
------- ------- ------- -------
Net income per
share, in cents
Basic earnings
attributable to
Net1 shareholders 42.5 48.6 79.0 93.8
Diluted earnings
attributable to
Net1 shareholders 42.3 48.5 78.8 93.5
NET 1 UEPS TECHNOLOGIES, INC.
Condensed Consolidated Balance Sheets
Unaudited (A)
December 31, June 30,
2009 2009
---- ----
(In thousands, except share data)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $152,871 $220,786
Pre-funded social
welfare grants
receivable 1,592 4,930
Accounts receivable, net
of allowances of –
December: $374; June:
$395 42,213 42,475
Finance loans receivable,
net of allowances of –
December: $244; June:
$226 4,548 2,563
Deferred expenditure on
smart cards 70 8
Inventory 4,953 7,250
Deferred income taxes 9,191 12,282
----- ------
Total current assets 215,438 290,294
OTHER LONG-TERM ASSETS,
including available for
sale securities 6,886 7,147
PROPERTY, PLANT AND
EQUIPMENT, NET OF
ACCUMULATED DEPRECIATION
OF – December: $31,559;
June: $28,169 7,075 7,376
EQUITY-ACCOUNTED
INVESTMENTS 2,265 2,583
GOODWILL 121,295 116,197
INTANGIBLE ASSETS, NET OF
ACCUMULATED AMORTIZATION
OF – December: $39,854; June: $31,150 70,806 75,890
------ ------
TOTAL ASSETS 423,765 499,487
------- -------
LIABILITIES
CURRENT LIABILITIES
Accounts payable 4,347 5,481
Other payables 57,431 61,454
Income taxes payable 7,598 10,874
----- ------
Total current liabilities 69,376 77,809
DEFERRED INCOME TAXES 46,876 41,737
OTHER LONG-TERM
LIABILITIES, including
non-controlling
interest loans 4,200 4,185
COMMITMENTS AND
CONTINGENCIES - -
--- ---
TOTAL LIABILITIES 120,452 123,731
------- -------
EQUITY
NET1 EQUITY:
COMMON STOCK
Authorized: 200,000,000
with $0.001 par value;
Issued and outstanding
shares, net of treasury
- December: 45,378,397;
June: 54,506,487 59 59
ADDITIONAL PAID-IN-
CAPITAL 130,493 126,914
TREASURY SHARES, AT COST:
December: 13,149,042;
June: 3,927,516 (173,671) (48,637)
ACCUMULATED OTHER
COMPREHENSIVE LOSS (46,666) (58,472)
RETAINED EARNINGS 390,578 353,353
------- -------
TOTAL NET1 EQUITY 300,793 373,217
NON-CONTROLLING INTEREST 2,520 2,539
----- -----
TOTAL EQUITY 303,313 375,756
------- -------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $423,765 $499,487
-------- --------
(A) – Derived from audited financial statements
NET 1 UEPS TECHNOLOGIES, INC.
Unaudited Condensed Consolidated Statements of Cash Flows
Three months ended Six months ended
------------------ ----------------
December 31, December 31,
------------ ------------
2009 2008 2009 2008
---- ---- ---- ----
(In thousands) (In thousands)
Cash flows from
operating
activities
Net income $19,550 28,464 $37,147 $54,768
Depreciation and
amortization 4,664 4,261 9,243 7,684
Impairment of
goodwill - 1,836 - 1,836
Loss from equity-
accounted
investments 270 226 381 536
Fair value
adjustments (29) (2,472) (171) (2,444)
Unrealized
foreign exchange
reversal (gain)
related to
short-term
investment - 5,061 - (1,015)
Interest payable 77 (408) 155 231
Loss (Profit) on
disposal of
property, plant
and equipment 3 (1) 2 -
Stock-based
compensation
charge 1,432 1,346 2,854 2,551
Facility fee
amortized - 352 - 1,100
Decrease
(Increase) in
accounts
receivable, pre-
funded social
welfare grants
receivable and
finance loans
receivable 521 8,350 6,050 (37,791)
Increase in
deferred
expenditure on
smart cards (30) (4) (60) (27)
Decrease in
inventory 1,671 511 2,686 294
Decrease in
accounts payable
and other
payables (9,367) (3,174) (9,342) (17,589)
(Decrease)
Increase in
taxes payable (6,527) 775 (316) 4,184
Increase
(Decrease) in
deferred taxes 1,536 751 2,111 (1,419)
----- --- ----- ------
Net cash provided
by operating
activities 13,771 45,874 50,740 12,899
------ ------ ------ ------
Cash flows from
investing
activities
Capital
expenditures (685) (439) (1,326) (3,283)
Proceeds from
disposal of
property, plant
and equipment 13 1 62 2
Acquisition of
Net1 UAT, net of
cash acquired - (458) - (95,786)
Acquisition of
shares in
equity-
accounted
investments - (50) - (600)
--- --- --- ----
Net cash used in
investing
activities (672) (946) (1,264) (99,667)
---- ---- ------ -------
Cash flows from
financing
activities
Proceeds from
issue of share
capital, net of
share issue
expenses - - 720 155
Treasury stock
acquired - (24,752) (126,304) (24,752)
Proceeds from
short-term loan
facility - - - 110,000
Repayment of
short-term loan
facility - (110,000) - (110,000)
Payment of
facility fee - - - (1,100)
Repayment of non-
controlling
interest loan - - (137) -
Proceeds from
bank overdrafts - 94 - 95
Repayment of
loans - - - -
--- --- --- ---
Net cash used in
financing
activities - (134,658) (125,721) (25,602)
--- -------- -------- -------
Effect of
exchange rate
changes on cash 460 (31,538) 8,330 (35,449)
--- ------- ----- -------
Net increase
(decrease) in
cash and cash
equivalents 13,559 (121,268) (67,915) (147,819)
Cash and cash
equivalents –
beginning of
period 139,312 245,924 220,786 272,475
------- ------- ------- -------
Cash and cash
equivalents –
end of period $152,871 124,656 $152,871 $124,656
-------- ------- -------- --------
Net 1 UEPS Technologies, Inc.
Attachment A
Operating segment revenue, operating income and operating margin:
Three months ended December 31, 2009 and 2008 and September 30, 2009
Change –
constant
exchange
Change - actual rate(1)
--------------- -------
Q2 '10 Q2 '10 Q2 '10 Q2 '10
Key segmental ------ ------ ------ ------
data, in vs vs vs vs
'000, except -- -- -- --
margins Q2 '10 Q2 '09 Q1 '10 Q2 '09 Q1 '10 Q2 '09 Q1 '10
------ ------ ------ ------ ------ ------ ------
Revenue:
Transaction-
based
activities $45,415 $32,820 $44,978 38% 1% 6% (3)%
Smart card
accounts 8,137 6,711 8,074 21% 1% (7)% (3)%
Financial
services 858 1,430 792 (40)% 8% (54)% 4%
Hardware,
software and
related
technology
sales 19,454 20,427 11,670 (5)% 67% (27)% 60%
------ ------ ------
Total
consolidated
revenue $73,864 $61,388 $65,514 20% 13% (8)% 9%
------- ------- -------
Consolidated
operating
income
(loss):
Transaction-
based
activities $26,733 $17,653 $26,668 51% 0% 16% (3)%
Smart card
accounts 3,699 3,050 3,670 21% 1% (7)% (3)%
Financial
services 546 (1,570) 531 (135)% 3% (127)% (1)%
Hardware,
software and
related
technology
sales 1,660 5,493 (1,713) (70)% (197)% (77)% (193)%
Corporate/
Eliminations (3,219) (1,821) (2,788) 77% 15% 35% 11%
------ ------ ------
Total
operating
income $29,419 $22,805 $26,368 29% 12% (1)% 7%
------- ------- -------
Operating
income
margin (%)
Transaction-
based
activities 59% 54% 59%
Smart card
accounts 45% 45% 45%
Financial
services 64% (110)% 67%
Hardware,
software and
related
technology
sales 9% 27% (15)%
Overall
operating
margin 40% 37% 40%
(1) – This information shows what the change in these items would have
been if the USD/ ZAR exchange rate that prevailed during the second
quarter of fiscal 2010 also prevailed during the second quarter of fiscal
2009 and the first quarter of fiscal 2010.
Six months ended December 31, 2009 and 2008
Change –
constant
Change - exchange
actual rate(1)
-------- --------
Q2 '10 Q2 '10
Key segmental ------ ------
data, in vs vs
'000, except -- --
margins Q2 '10 Q2 '09 Q2 '09 Q1 '10
------ ------ ------ ------
Revenue:
Transaction-
based
activities $90,393 $73,164 24% 8%
Smart card
accounts 16,211 15,281 6% (8)%
Financial
services 1,650 3,214 (49)% (55)%
Hardware,
software and
related
technology
sales 31,124 37,664 (17)% (28)%
------ ------
Total
consolidated
revenue 139,378 129,323 8% (6)%
------- -------
Consolidated operating
income (loss):
Transaction-
based
activities $53,401 $39,291 36% 18%
Smart card
accounts 7,369 6,945 6% (8)%
Financial
services 1,077 (1,243) (187)% (176)%
Hardware,
software and
related
technology
sales (53) 9,627 (101)% (100)%
Corporate/
Eliminations (6,007) (4,537) 32% 15%
------ ------
Total
operating
income $55,787 $50,083 11% (3)%
------- -------
Operating income
margin (%)
Transaction-
based
activities 59% 54%
Smart card
accounts 45% 45%
Financial
services 65% (39)%
Hardware,
software and
related
technology
sales -% 26%
Overall
operating
margin 40% 39%
(1) – This information shows what the change in these items would have
been if the USD/ ZAR exchange rate that prevailed during the first half
of fiscal 2010 also prevailed during the first half of fiscal 2009.
Net 1 UEPS Technologies, Inc.
Attachment B
Reconciliation of GAAP net income to fundamental net income:
Three months ended December 31, 2009 and 2008
Net Income EPS, basic Net income EPS, basic
(USD'000) (USD cents) (ZAR'000) (ZAR cents)
--------- --------- --------- ---------
2009 2008 2009 2008 2009 2008 2009 2008
---- ---- ---- ---- ---- ---- ---- ----
GAAP 19,284 27,762 43 49 145,091 272,875 320 478
Amortization of
intangible
assets(1) 2,524 2,276 18,988 22,371
----- ----- ------ ------
Customer
relationships 3,346 2,412 25,171 23,713
Software and
unpatented
technology - 676 - 6,642
Trademarks 90 69 679 679
Deferred tax
benefit (912) (881) (6,862) (8,663)
---- ---- ------ ------
Stock-based
charge 1,431 1,346 10,767 13,230
JSE listing
costs - 84 - 826
Facility fee - 352 - 3,460
Foreign
exchange gain
related to a
short-term
investment,
net of tax of
$7,111 - (13,470) - (132,397)
Impairment of
goodwill - 1,836 - 18,046
--- ----- --- ------
Fundamental 23,239 20,186 51 36 174,846 198,411 385 348
------ ------ ------- -------
(1) Amortization of Prism, EasyPay, RMT and BGS intangibles, net of
deferred tax benefit.
(2) Includes stock-based compensation charges related to options and
non-vested stock awards.
Six months ended December 31, 2009 and 2008
Net Income EPS, basic Net income EPS, basic
(USD'000) (USD cents) (ZAR'000) (ZAR cents)
--------- --------- --------- ----------
2009 2008 2009 2008 2009 2008 2009 2008
---- ---- ---- ---- ---- ---- ---- ----
GAAP 37,225 54,006 79 94 285,601 475,302 606 826
Amortization
of intangible
assets(1) 4,964 3,749 38,080 32,995
----- ----- ------ ------
Customer
relationships 6,582 3,609 50,494 31,759
Software and
unpatented
technology - 1,509 - 13,284
Trademarks 177 154 1,358 1,358
Deferred tax
benefit (1,795) (1,523) (13,772) (13,406)
------ ------ ------- -------
Stock-based
charge(2) 2,854 2,551 21,897 22,451
JSE listing
costs - 495 - 4,356
Facility fee - 1,100 - 9,681
Foreign
exchange
gain
related to
a short-
term
investment,
net of tax
of $9,210 - (17,447) - (153,549)
Impairment
of goodwill - 1,836 - 16,158
Change in
tax rate - (3,456) - (26,524)
--- ------ --- -------
Fundamental 45,043 42,834 96 74 345,578 380,870 734 662
------ ------ ------- -------
(1) Amortization of Prism, EasyPay, RMT and BGS intangibles, net of
deferred tax benefit.
(2) Includes stock-based compensation charges related to options and
non-vested stock awards.
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 December 31, 2009 and 2008
2009 2008
---- ----
Net income (USD'000) 19,284 27,762
Adjustments:
Impairment of goodwill - 1,836
Loss (Profit) on sale of property,
plant and equipment (USD'000) 3 (1)
Tax effects on above (USD'000) (1) -
Net income used to calculate headline
earnings (USD'000) 19,286 29,597
------ ------
Weighted average number of shares used
to calculate net income per share
basic earnings and headline earnings
per share basic earnings ('000) 45,378 57,068
Weighted average number of shares used
to calculate net income per share
diluted earnings and headline
earnings per share diluted earnings
('000) 45,588 57,777
Headline earnings per share:
Basic earnings – common stock and
linked units, in US cents 43 52
Diluted earnings – common stock and
linked units, in US cents 42 51
Six months ended December 31, 2009 and 2008
2009 2008
---- ----
Net income (USD'000) 37,225 54,006
Adjustments:
Impairment of goodwill 1,836
Loss (Profit) on sale of property,
plant and equipment (USD'000) 2 -
Tax effects on above (USD'000) (1) -
Net income used to calculate headline
earnings (USD'000) 37,226 55,842
------ ------
Weighted average number of shares used
to calculate net income per share
basic earnings and headline earnings
per share basic earnings ('000) 47,097 57,550
Weighted average number of shares used
to calculate net income per share
diluted earnings and headline
earnings per share diluted earnings
('000) 47,253 57,777
Headline earnings per share:
Basic earnings – common stock and
linked units, in US cents 79 97
Diluted earnings – common stock and
linked units, in US cents 79 97
SOURCE Net 1 UEPS Technologies, Inc.
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